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Microsoft bet billions on ChatGPT developer OpenAI

OpenAI CEO Sam Altman, left, and Microsoft CEO Satya Nadella

Microsoft announced last week that 10,000 employees will be laid off by 2023. However, this does not imply that the business is having financial issues. The company made the announcement on Monday that it would be investing billions of dollars in the highly anticipated artificial intelligence platform OpenAI.

Microsoft’s partnership with one of the most exciting companies developing one of the most exciting technologies in the world is strengthened by this third investment: AI that generates. In addition, it demonstrates Microsoft’s determination to make the initiative an essential part of its business as it looks toward the technological future and its place in it. Additionally, as you use companies that incorporate OpenAI into their own offerings, you can probably anticipate utilizing its services on a daily basis.

Semafor reported two weeks ago that the two companies were talking about $10 billion, with Microsoft receiving 75% of OpenAI’s profits until it recoups its investment, at which point it would have a 49% stake in the company. Microsoft told Recode that it was not disclosing the specifics of the deal. The $10 billion figure has since been confirmed by The New York Times.

OpenAI is able to scale and make its technology available to developers and businesses looking to use AI in their own services (rather than having to build their own) thanks to the arrangement, which uses Microsoft’s Azure cloud computing platform to run and power its technology. It’s known as AI as a service or AIaaS. Microsoft recently made its OpenAI services widely available, making it possible for more businesses to incorporate some of the most recent AI technologies into their own offerings. These technologies include the word generator ChatGPT and the image generator DALL-E 2.

In the meantime, OpenAI receives the cash it needs, which is important for a company with a lot of potential but little evidence of monetization. Additionally, Microsoft can provide its cloud customers with something that rivals Google and Amazon do not yet: one of the most talked-about AI technologies and one of the most advanced. They do have their own AI programs, like Google’s DeepMind, which is said to be launching a rival to ChatGPT at some point. But it hasn’t arrived yet. ChatGPT is, and it is now widely used.

OpenAI was established in 2015 as a research laboratory with financial backing from prominent Silicon Valley figures such as Reid Hoffman, Peter Thiel, and Elon Musk. Its CEO and co-founder is Sam Altman, a former president of the startup incubator Y Combinator. Since the beginning, the company has emphasized its commitment to creating AI technologies that are “safe” and “responsible.” Some people have long feared that artificial intelligence could take over the world and become as intelligent as SkyNet.

At the end of 2019, Microsoft stepped in with a $1 billion investment in OpenAI and a partnership to assist the company in continuing to develop artificial general intelligence (AGI), also known as AI that is able to learn and perform new tasks.

“We believe that it is essential that AGI be deployed in a safe and secure manner and that its economic benefits be shared widely.” “The extent to which Microsoft shares this vision excites us,” Altman stated at the time.

Microsoft made a second investment in 2021, and now a much larger one in 2023, demonstrating the potential of this technology and its desire to be a key player in its development and deployment. The arrangement has worked out well enough that Microsoft made the second investment.

In a statement, Microsoft CEO and chair Satya Nadella said, “We formed our partnership with OpenAI around a shared ambition to responsibly advance cutting-edge AI research and democratize AI as a new technology platform.” With Azure, developers and organizations from all sectors will have access to the best AI infrastructure, models, and toolchain for building and running their applications in the next phase of our partnership.

Although Microsoft stated in its announcement that it intends to use OpenAI in its consumer products as well, the company has primarily focused its operations on providing software and services for businesses. How might that appear? According to a report in the Information, Microsoft will incorporate ChatGPT into its Bing search engine. This will give it the ability to formulate and write down responses to questions rather than simply distributing a series of links. There are undoubtedly numerous opportunities to incorporate AI into gaming, a market in which Microsoft owns a significant stake.

Most people think that the great new technology frontier is generative AI, or artificial general intelligence. OpenAI is the best AGI company. Additionally, Microsoft’s position in that future appears to be fairly secure at the moment.