Microsoft can't stop itself blowing billions on OpenAI

Embrace, extend ... extinguish, but whom or what this time?

Microsoft announced its latest "multi-year, multi-billion dollar" investment into OpenAI on Monday, cementing its position as the startup's exclusive cloud provider.

As far as some are concerned, the Windows giant is the de facto owner of OpenAI, having poured tons of resources into the precocious machine-learning lab so far.

"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," Microsoft boss Satya Nadella said in a canned statement.

"In this next phase of our partnership, developers and organizations across industries will have access to the best AI infrastructure, models, and toolchain with Azure to build and run their applications."

The financial and technical details of this latest collaboration were not officially disclosed, but has been rumored to be worth as much as $10 billion. The injection of support, led by Microsoft, is backed by other investors, and marks the third time Redmond has bought into OpenAI.

Microsoft began its partnership with the San-Francisco-based upstart in 2019 when the IT giant pledged $1 billion, and splashed out on a second series of funding in 2021. One year prior to this, Redmond had secured an exclusive license to incorporate OpenAI's text-generation GPT-3 system into its own tech and applications.

Now, Microsoft has negotiated a fresh agreement in the wake of various machine-learning models crafted by OpenAI, including the brains behind the automated pair-programmer tool GitHub Copilot; text-to-image model DALL·E 2; and its latest text-generation bot ChatGPT. Microsoft will also expand its artificially intelligent offerings on its Azure cloud platform using OpenAI's know-how; the duo's Azure OpenAI service was made generally available last week.

As OpenAI's exclusive cloud provider, Microosft will host and deploy the startup's models for R&D, as well as for products and API services. The latest investment is a win-win for both companies.

Redmond will gain access to cutting-edge AI technology to create products and revamp old ones, while attracting customers who want to use OpenAI's models to Azure. Meanwhile, OpenAI will get more funding and/or compute to carry out AI research and develop more products. We all know that today's state-of-the-art models require incredible amounts of data, storage, processing, and more to build, test, and deploy. OpenAI's latest beast, GPT-4, is supposed to be coming soon.

Microsoft is reportedly exploring how ChatGPT-esque responses to queries can be used to improve its web search engine Bing, and its Microsoft Office programs, such as Outlook, Powerpoint, and Word.

OpenAI CEO Sam Altman said: "Microsoft shares our values and we are excited to continue our independent research and work toward creating advanced AI that benefits everyone."

Rumor has it Microsoft will nab 75 per cent of OpenAI's profits until it recoups its portion of the investment, after which it will go on to take a 49 per cent stake into the startup. We'll see, but Microsoft will always have its due, one way or another. ®

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