• Microsoft's CEO has said OpenAI's two-year lead in the AI race gave it "escape velocity" to build out ChatGPT.
• Satya Nadella told a podcast this gave OpenAI "two years of runway" to work "pretty much uncontested."
• Microsoft stepped up investing in the startup after ChatGPT's launch in November 2022.

Microsoft CEO Satya Nadella has said OpenAI has benefited from a two-year lead in the AI race to work "pretty much uncontested."

The startup, in which Microsoft has been investing since 2019, prompted an AI arms race when it released ChatGPT in November 2022, which Nadella said gave it an "escape velocity."

The launch left rival companies such as Google battling claims they had been caught off guard by the chatbot's launch.

"The advantage we have had, and OpenAI has had, which is we've had two years of runway — pretty much uncontested," Nadella said on an episode of the "BG2Pod with Brad Gerstner and Bill Gurley" released on Thursday.

"I don't think they'll be ever again, maybe, be a two-year lead like this," Nadella said. "I think it's unlikely that that type of lead could be established with some foundation model, but we have that advantage, that was the great advantage we've had with OpenAI."

After ChatGPT's launch, Microsoft capitalized on its 2019 investment to build a closer partnership with OpenAI and began incorporating the company's tech into its Office apps, the Bing search engine, and Edge — beating its biggest rivals to market.

In return, Microsoft has provided OpenAI with massive cloud-computing resources.

Microsoft was an early investor in OpenAI, investing $1 billion in 2019. The tech giant has invested a total of $13 billion in the company, according to its latest Securities and Exchange Commission filings.

In the same filing, Microsoft described its relationship with OpenAI as an equity investment rather than a partnership, as it had previously done.

In its July SEC filing, it listed OpenAI alongside Anthropic and Meta as "emerging competitors."