Microsoft to Invest $10 Billion in OpenAI, the Creator of ChatGPT

Microsoft said on Monday that it was making a “multiyear, multibillion-dollar” investment in OpenAI, the San Francisco artificial intelligence lab behind the experimental online chatbot ChatGPT.

The companies did not disclose the specific financial terms of the deal, but a person familiar with the matter said Microsoft would invest $10 billion in OpenAI.

Microsoft had already invested more than $3 billion in OpenAI, and the new deal is a clear indication of the importance of OpenAI’s technology to the future of Microsoft and its competition with other big tech companies like Google, Meta and Apple.

With Microsoft’s deep pockets and OpenAI’s cutting-edge artificial intelligence, the companies hope to remain at the forefront of generative artificial intelligence — technologies that can generate text, images and other media in response to short prompts. After its surprise release at the end of November, ChatGPT — a chatbot that answers questions in clear, well-punctuated prose — became the symbol of a new and more powerful wave of A.I.

The fruit of more than a decade of research inside companies like OpenAI, Google and Meta, these technologies are poised to remake everything from online search engines like Google Search and Microsoft Bing to photo and graphics editors like Photoshop.

The deal follows Microsoft’s announcement last week that it had begun laying off employees as part of an effort to cull 10,000 positions. The changes, including severance, ending leases and what it called “changes to our hardware portfolio” would cost $1.2 billion, it said.

Satya Nadella, the company’s chief executive, said last week that the cuts would let the company refocus on priorities such as artificial intelligence, which he called “the next major wave of computing.”

Mr. Nadella made clear in his company’s announcement on Monday that the next phase of the partnership with OpenAI would focus on bringing tools to the market, saying that “developers and organizations across industries will have access to the best A.I. infrastructure, models and tool chain.”

OpenAI was created in 2015 by small group of entrepreneurs and artificial intelligence researchers, including Sam Altman, head of the start-up builder Y Combinator; Elon Musk, the billionaire chief executive of the electric carmaker Tesla; and Ilya Sutskever, one of the most important researchers of the past decade.

They founded the lab as a nonprofit organization. But after Mr. Musk left the venture in 2018, Mr. Altman remade OpenAI as a for-profit company so it could raise the money needed for its research.

Last week, it expanded availability of several OpenAI services to customers of Microsoft’s Azure cloud computing offering, and said ChatGPT would be “coming soon.”

The company said it planned to report its latest quarterly results on Tuesday, and investors expect the difficult economy, including declining personal computer sales and more cautious business spending, to further hit revenues.

Microsoft has faced slowing growth since late summer, and Wall Street analysts expect the new financial results to show its slowest growth since 2016. But the business still produces substantial profits and cash. It has continued to return money to investors through quarterly dividends and a $60 billion share buyback program authorized by its board in 2021.

Both Microsoft and OpenAI say their goals are even higher than a better chatbot or programming assistant.

OpenAI’s stated mission was to build artificial general intelligence, or A.G.I., a machine that can do anything the human brain can do. When OpenAI announced its initial deal with Microsoft in 2019, Mr. Nadella described it as the kind of lofty goal that a company like Microsoft should pursue, comparing A.G.I. to the company’s efforts to build a quantum computer, a machine that would be exponentially faster than today’s machines.

“Whether it’s our pursuit of quantum computing or it’s a pursuit of A.G.I., I think you need these high-ambition North Stars,” he said.

That is not something that researchers necessarily know how to build. But many believe that systems like ChatGPT are a path to this lofty goal.

Sahred From Source link Business

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