Microsoft CEO Satya Nadella revealed that Bill Gates warned him his major investment in OpenAI would fail: ‘You’re just going to waste this billion dollars’

Microsoft’s Bold Bet on OpenAI Pays Off

OpenAI has risen to become the most valuable privately held company in the world. However, back in 2019, when Microsoft made its initial investment of $1 billion in OpenAI, the outcome was far from certain.

During an interview on the tech YouTube channel TBPN, Microsoft CEO Satya Nadella shared that even Bill Gates, the company’s cofounder and first CEO, was skeptical about the move.

Nadella recalled, “At the time, OpenAI was a nonprofit, and Bill [Gates] remarked, ‘You’re just going to burn through that billion dollars.’”

Despite the doubts, Nadella and his leadership team pressed forward. He explained that while the size of the investment required board approval, it wasn’t difficult to persuade others of the significance of artificial intelligence. “We were willing to take on considerable risk and decided to give it a try,” Nadella said.

Microsoft’s 2019 collaboration with OpenAI was seen as a strategic move to strengthen its position in AI and showcase Azure’s capabilities. Nadella admitted that no one could have foreseen how that initial investment would pave the way for Microsoft to eventually commit $13 billion to OpenAI.

“Looking back, who could have imagined this outcome? I didn’t invest a billion dollars expecting it to multiply a hundredfold,” Nadella reflected.

Microsoft declined to comment when approached by Fortune.

Transformative Returns and New Agreements

By October, Microsoft began to see significant returns as OpenAI restructured, granting Microsoft a 27% ownership stake valued at approximately $135 billion. While Microsoft gave up its exclusive cloud partnership with OpenAI, the companies agreed that OpenAI would purchase $250 billion worth of Azure services over time.

In January, Microsoft reported that OpenAI contributed $7.6 billion to its net income. Under a revised agreement, OpenAI is expected to pay Microsoft 20% of its revenue through 2032, while also gaining more flexibility to source computing power from other providers, according to The Information reports.

Bill Gates’ Changing Perspective on AI

Although initially uncertain, Bill Gates later expressed admiration for the rapid progress of artificial intelligence. Appearing on The Tonight Show last year, Gates told Jimmy Fallon that AI’s advancement could eventually render most human tasks unnecessary.

“There will be some things we keep for ourselves,” Gates said. “But when it comes to manufacturing, transportation, and agriculture, these will eventually become fully automated.”

This article was first published on Fortune.com on October 30, 2025.

Further Reading on AI

• Anthropic, once seen as a ‘safe’ alternative to OpenAI, faces challenges as CEO Dario Amodei admits the company struggles to balance safety and profitability.

• Sam Altman and Dario Amodei declined to collaborate at an AI summit, following a heated Super Bowl advertising battle between OpenAI and Anthropic.

• Contrary to expectations, AI is having unexpected effects on the workforce, according to researchers at UC Berkeley.

This story originally appeared on Fortune.com.