February 1, 2023

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Microsoft is investing $10 billion in OpenAI, the creator of ChatGPT

Microsoft said Monday it is making a “multi-year, multi-billion dollar” investment in OpenAI, the San Francisco artificial intelligence lab behind experimental online chatbot ChatGPT.

The companies did not disclose the exact financial terms of the deal, but a person familiar with the matter told Microsoft You will invest 10 billion dollars in OpenAI.

Microsoft has already invested more than $3 billion in OpenAI, and the new deal is a clear indication of the importance of OpenAI 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, companies hope to stay ahead of the curve Generative artificial intelligence – Technologies that can generate text, images, and other media in response to short prompts. After its sudden launch at the end of November, ChatGPT – A chatbot that answers questions in clear, well-defined prose It has become a symbol of a new and more powerful wave of artificial intelligence

The fruit of more than a decade of research inside companies like OpenAI, Google, and Meta, these technologies are poised to remake everything from Internet search engines such as Google Search and Microsoft Bing to Image and graphics editing software such as Photoshop.

The deal comes on the heels of Microsoft’s announcement last week that it had begun laying off employees as part of an effort Killed 10,000 jobs. He said the changes, including termination of service, termination of leases and what he called “changes to our hardware portfolio” would cost $1.2 billion.

The company’s CEO, Satya Nadella, said last week that the cuts would allow the company to refocus on priorities like artificial intelligence, which he called “the next major wave of computing.”

In his company’s announcement on Monday, Mr. Nadella explained that the next phase of the partnership with OpenAI will focus on bringing the tools to market, saying, “Developers and organizations across industries will have access to the best AI infrastructure, models and toolchain.”

OpenAI was created in 2015 by a small group of entrepreneurs and AI researchers, including Sam Altman, president of startup-building firm Y Combinator; Elon Musk, billionaire CEO of electric car maker Tesla. and Ilya Sotskiver, One of the most important researchers of the last decade.

They established the laboratory as a non-profit organization. But after Mr. Musk left the project in 2018, Altman reconfigured OpenAI as a for-profit company so that it could raise funds for its research.

A year later, Microsoft Invest a billion dollars in the company; over the next few years I quietly invested another $2 billion. This money paid for the massive amounts of computing power needed to build the kind of generative AI technologies that OpenAI is known for.

OpenAI is also in talks to complete a deal to sell existing shares in a so-called tender offer. This could total up to $300 million, depending on how many employees agree to sell their shares, according to two people familiar with the discussions, and would value the company at about $29 billion.

In 2020, OpenAI is built A prominent artificial intelligence system called GPT-3 It can generate text on its own, including tweets, blog posts, news articles, and even computer code. It was revealed last year DALL-Ewhich allows anyone to create realistic images by simply describing what they want to see.

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Based on the same technology as GPT-3, ChatGPT showed the general public how powerful this kind of technology is. More than a million people tested the chatbot during its first few days online, using it to answer trivia questions, explain ideas and create everything from poetry to research papers.

Microsoft has already integrated GPT-3, DALL-E, and other OpenAI technologies into its products. In particular, GitHub, a popular online service for programmers owned by Microsoft, offers a tool called Copilot that It can automatically generate snippets of computer code.

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

The company said it plans to report its latest quarterly results on Tuesday, and investors expect a tough economy, including lower PC sales and more caution in business spending, to weigh more heavily on revenue.

Microsoft has faced slowing growth since late summer, and Wall Street analysts expect new financial results to show the slowest growth since 2016. But the company is still making big money and money. I continued Return money to investors Through a quarterly dividend and a $60 billion share repurchase program authorized by its Board of Directors in 2021.

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

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

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He said, “Whether it’s our pursuit of quantum computing or the pursuit of artificial general intelligence, I think you need North Stars with high ambition.”

This is not something researchers necessarily know how to construct. But many believe that systems like ChatGPT are a path to this noble goal.

In the near term, these technologies are a way for Microsoft to expand its business, increase revenue, and compete with the likes of Google and Meta, which also approaches AI developments with a sense of urgency.

Sunda Pichai, CEO of Alphabet, the parent company of Google, recently Announce “code redPlans upside down and start developing artificial intelligence. Google plans to unveil more than 20 products and demonstrate a version of its search engine with chatbot features this year, according to a slide presentation reviewed by The New York Times and two unauthorized people familiar with the plans. by discussing it.

But new AI technologies come with a long list of drawbacks. They often produce toxic content, incl misinformationand hate speech and images that are biased against women and people of color.

Microsoft, Google, Meta, and other companies have been reluctant to release many of these technologies because they could damage their established brands. Five years ago, Microsoft released a chatbot called Tay that generated racist and xenophobic language and quickly removed it from the internet after complaints from users.

Nico Grant contributed reporting.