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Microsoft drops gauntlet on Google, announces plans to make ‘multibillion-dollar’ investment in ChatGPT creator

Following a wave of interest in ChatGPT, early OpenAI investor Microsoft commits to pouring billions into the artificial intelligence start-up. The move is a wake-up call for Google and its own AI efforts

SHARE Microsoft drops gauntlet on Google, announces plans to make ‘multibillion-dollar’ investment in ChatGPT creator
Microsoft says it is making a “multiyear, multibillion-dollar investment” in the artificial intelligence startup OpenAI on Jan. 23, 2023

In this Nov. 10, 2016, file photo, people walk past a Microsoft office in New York. Microsoft says it is making a “multiyear, multibillion-dollar investment” in the artificial intelligence startup OpenAI, maker of ChatGPT and other tools that can generate readable text, images and computer code. The tech giant on Monday, Jan. 23, 2023 described its new agreement as the third stage of a growing partnership with San Francisco-based OpenAI that began with a $1 billion investment in 2019.

Swayne B. Hall, Associated Press

Software giant Microsoft just revealed plans to invest billions in OpenAI, the company behind the ChatGPT artificial intelligence tool that’s drawn a tidal wave of interest, and conjecture, since its November release.

In a Monday blog post, Microsoft announced a third phase of the company’s “long-term partnership with OpenAI through a multiyear, multibillion-dollar investment to accelerate AI breakthroughs to ensure these benefits are broadly shared with the world.”

The infusion of cash will help turbocharge OpenAI’s fast moving machine learning and artificial intelligence innovations and, at the same time, provide Microsoft commercial access to potentially very powerful new technology to challenge Google’s dominance in search and AI advancements.

The investment commitment follows two previous rounds of Microsoft investment in OpenAI, a startup co-founded by Sam Altman, Tesla/SpaceX CEO Elon Musk and others in 2015. Per the announcement, Microsoft will also be able to incorporate OpenAI’s artificial intelligence advancements into its own new and/or existing products.

“This agreement follows our previous investments in 2019 and 2021,” Microsoft’s blog post reads. “It extends our ongoing collaboration across AI supercomputing and research and enables each of us to independently commercialize the resulting advanced AI technologies.”

What is ChatGPT?

ChatGPT is part of a new generation of AI systems that can converse and generate readable text on demand based on what they’ve learned from a vast database of digital books, online writings and other media, per The Associated Press.

Unlike a search engine response to a question, which simply points you to the answer where it already lives on the internet, ChatGPT generates its own original answers based on all the information it has already ingested and assessed. Thus, while Google isn’t going to help you write a sonnet in the style of, say, Hunter S. Thompson, ChatGPT will easily churn that out for you in just a matter of moments.

What’s driving all the hubbub now is that while ChatGPT is just the latest iteration of a series of AI system releases from OpenAI, it’s the first one that’s been publicly available — and free.

Morgan Stanley published a report in December looking at whether ChatGPT is a threat to Google. Brian Nowak, the bank’s lead analyst on Alphabet, wrote that the bearish case for Google is that language models could take market share “and disrupt Google’s position as the entry point for people on the Internet,” per CNBC.

What OpenAI says about Microsoft’s new investment commitment

In its own version of the investment announcement, OpenAI noted that it leans heavily on Microsoft’s cloud computing platform, Azure, to advance its artificial intelligence research.

“We’ve worked together (with Microsoft) to build multiple supercomputing systems powered by Azure, which we use to train all of our models,” OpenAI wrote in a blog post on Monday. “Azure’s unique architecture design has been crucial in delivering best-in-class performance and scale for our AI training and inference workloads. Microsoft will increase their investment in these systems to accelerate our independent research and Azure will remain the exclusive cloud provider for all OpenAI workloads across our research, API and products.”

OpenAI is among the world leaders in artificial intelligence research

OpenAI is ranked by artificial intelligence researchers as one of the top three AI labs worldwide, according to a report from CNBC. The company has developed game-playing AI software that can beat humans at video games such as Dota 2. However, it’s arguably received more attention for its AI text generator GPT-3, ChatGPT and its quirky AI image generator Dall-E, per CNBC.

ChatGPT automatically generates text based on written prompts in a fashion that’s much more advanced and creative than the chatbots of Silicon Valley’s past. The software debuted in late November and quickly turned into a viral sensation as tech executives and venture capitalists gushed about it on Twitter, even comparing it to Apple’s debut of the iPhone in 2007, according to CNBC.