I think the situation is tough because I can't imagine there aren't legal agreements in place around what OpenAI has to do to access the funding tranches and compute power, but who knows if they are in a position to force the issue, or if I'm write in my supposition to begin with. Even if I am, a protracted legal battle where they don't have access to compute resources, particularly if they can't get an injunction, might be extremely deleterious to OpenAI.
Perhaps Microsoft even knows that they will take a bath on things if they follow this, but don't want to gain a reputation of allowing this sort of thing to happen - they are big enough to take a total bath on the OpenAI side of things and it not be anything close to a fatal blow.
I was more skeptical of this being the case last night, but less so now.
Hypothetically he might also have very little trust in the decision making abilities of the new management and how much their future goals will align with those of Microsoft.
When I see it, it has always been “Amazon is a competitor and we don’t buy from competitors”.