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Microsoft axes industrial metaverse project Airsim shifts AI strategy to OpenAI

According to foreign media cited sources familiar with the matter revealed that on Monday Microsoft is responsible for the development of an “industrial meta-universe” Project Airsim team members received a “team update” notice and were told that the company will fire the whole team and terminate the project. The team was told that the company would fire the entire team and terminate the project. Microsoft has also confirmed that it will terminate the project on December 15th of this year.

In a statement, Microsoft said, “We are proud of the impact this incubation program has had for our customers, and we will continue to invest in Azure to provide a computing platform for virtual worlds in industry as well as for a variety of AI projects within our company.” “We are working closely with our customers to realize this transformation.”

Prior to this, Microsoft officially ceased support on October 19 for Project Bonsai, an AI development platform for building automated systems for industrial use. Both programs are considered part of Microsoft’s “industrial meta-universe.”

Microsoft acquired the AI startup Bonsai in 2018, which was seen internally as Microsoft’s response to Google’s acquisition of Deepmind, people familiar with the matter said. Project Airsim was initially launched as an open-source project in 2017 but has since shifted its focus to products for industrial customers.

Both Project Airsim and Project Bonsai were driven by Kevin Scott, Microsoft’s chief technology officer. He brokered Microsoft’s partnership with OpenAI, which incubated the projects to enable industrial customers to use new products from Microsoft’s cloud business.

Nadella has talked about Project Bonsai the same way he talks about OpenAI today, mentioning it as part of Microsoft’s AI future in staff meetings and public interviews, according to a person familiar with the project.

The person familiar with the matter said that Microsoft initially saw the projects as a means to attract application developers in the industrial space and help Microsoft’s Azure cloud be able to compete with Amazon Web Services AWS. However as Microsoft’s partnership with OpenAI has grown, Scott has become less interested in the programs.

In early 2023, around the time Microsoft announced its expanded partnership with OpenAI, the company also began touting its vision for an industrial metaverse. But the good times didn’t last long for the projects in question, as Microsoft terminated Project Bonsai and laid off the 100-person team in charge of the project this spring, just a few months after it had assembled the team.

The person familiar with the matter said that Microsoft retained Project Airsim because it believed the incubator had a large number of potential customers.

Gurdeep Pall, a former Microsoft vice president who was head of product incubation and business AI, responsible for Project Bonsai and, most recently, Project Airsim, left the company last month after 33 years of service.

The termination of Project Airsim is another example of Microsoft shifting resources toward OpenAI. Last month it was reported that Microsoft was abandoning experimental products like the Surface headset to focus on investing in AI.

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