Microsoft announced last week that it will lay off 10,000 people by the end of 2023. On Monday, the company announced it was investing billions in OpenAI, a popular artificial intelligence platform.
This is Microsoft’s third investment in the company and solidifies Microsoft’s partnership with one of the most exciting companies developing one of the most exciting technologies today: generative AI. It also shows how Microsoft sees the future of technology and where it stands, and is committed to making this initiative a vital part of its business. We can also expect companies to see his OpenAI services in their daily lives by integrating them into their products.
Microsoft told Recode it didn’t disclose details of the deal, but Semafor said two weeks ago that the two companies were in talks of $10 billion and that Microsoft would keep 75% of OpenAI’s profits until it recouped its investment. acquired, and later reported that it would acquire a 49% stake. at the company. The New York Times has since confirmed the $10 billion amount.
With this arrangement, OpenAI will run and power its technology via Microsoft’s Azure cloud computing platform. This makes it extensible and available to developers and enterprises looking to use AI in their own services (rather than building their own). AIaaS — Think AI as a service. Microsoft recently made its OpenAI service widely available, allowing more companies to integrate the latest AI technologies such as the word generator ChatGPT and the image generator DALL-E 2 into their products.
Meanwhile, OpenAI also gets the cash injection it needs. This is important for a company that has a lot of potential but doesn’t have much to show in terms of monetization. And Microsoft can match Google and Amazon to cloud customers. It is one of the most advanced AI technologies and one of the most talked about technologies. They have their own AI initiatives like Google’s DeepMind. It is reportedly rolling out a rival to ChatGPT at some point. But it’s not here yet. ChatGPT has gone mainstream.
OpenAI was founded as a lab in 2015 with backing from Silicon Valley heavyweights like Peter Thiel, Elon Musk, and Reid Hoffman. Sam Altman, former president of startup incubator Y Combinator, is his CEO and co-founder. From the beginning, the company has promoted a commitment to developing ‘safe’ and ‘responsible’ AI technology. There has been a long-standing concern that if artificial intelligence gets too smart, it will erode us all into his SkyNet.
At the end of 2019, Microsoft made a $1 billion investment and partnership with OpenAI to help the company continue its artificial general intelligence (AGI) development. In other words, AI that can learn and perform new tasks.
“We believe it is critical that AGI is deployed safely and reliably, and that its economic benefits are widely distributed. We are thrilled at how deeply Microsoft shares this vision.” said Altman at the time.
The arrangement worked well enough that Microsoft made a second investment in 2021 and an even bigger investment in 2023. This demonstrates the potential Microsoft sees in this technology and its desire to be a key player in its development and deployment.
Satya Nadella, CEO and Chairman of Microsoft, said in a statement: The next phase of this partnership will give developers and organizations across industries access to the best AI infrastructure, models and toolchains to build and run their applications using Azure. ”
While Microsoft has focused its business primarily on enterprise software and services, the company said in its announcement that it intends to use OpenAI in consumer products as well. what would that look like? Information reported that Microsoft plans to integrate ChatGPT into its Bing search engine to not only display a set of links, but also allow users to compose and export answers to questions. There are certainly plenty of opportunities to integrate AI into gaming, a market that Xbox owners Microsoft has a sizeable part of.
Generative AI, or artificial general intelligence, is seen as a great new frontier in technology. OpenAI is the AGI company to beat. And if you’re Microsoft, your place in that future looks pretty good so far.