Microsoft most likely to partner with OpenAI’s rival, Elon Musk

Microsoft may likely be planning to tie-up with OpenAI's 'biggest rival, Elon Musk. Microsoft has reportedly been “instructing engineers working on its AI infrastructure to get ready to host Elon Musk’s Grok AI model." The partnership is likely to not go well with Microsoft's closest ally ChatGPT maker OpenAI that went to court late last month against Musk. In early 2024, Elon Musk sued the company claiming that OpenAI is using GPT-4 to ‘maximize profits’ instead of ‘‘for the benefit of humanity.’

What it means for Microsoft?

This move would provide developers and Microsoft product teams access to Grok, enabling integration into applications and services. While potentially strengthening Microsoft's AI portfolio, the decision could heighten tensions with its existing AI partner OpenAI, especially amid growing competition and reported internal friction.

Microsoft CEO Satya Nadella is keen on positioning Azure as the premiere infrastructure for hosting leading and emerging AI models, regardless of origin. This includes incorporating models from competitors like DeepSeek, Anthropic, and Google, demonstrating Microsoft’s intent to diversify its AI ecosystem.

Although Grok’s training will remain internal to Musk’s xAI, hosting it on Azure emphasizes Microsoft’s ambition to be the primary backend provider for AI agents. The announcement is likely to coincide with the Microsoft Build conference on May 19th.

This development follows Microsoft's recent collaboration with xAI and other industry leaders, including Nvidia and BlackRock, to establish the AI Infrastructure Partnership (AIP), a $30 billion initiative aimed at developing AI infrastructure in the U.S. The consortium focuses on building data centers and energy facilities required by AI applications like ChatGPT, marking a significant move in the AI landscape.