Microsoft to invest $10 billion in OpenAI, creator of popular ChatGPT chatbot

Microsoft plans to invest many billions of dollars in San Francisco-based artificial intelligence (AI) lab OpenAI, developer of the popular ChatGPT experimental chatbot and DALL-E 2 image generator.

According to The New York Times, the company did not disclose specific financial terms of the deal, but a source familiar with the deal said Microsoft's investment in OpenAI will total $10 billion.

OpenAI: Eight years of AI development

OpenAI was founded in 2015 by Y Combinator CEO Sam Altman, Tesla and SpaceX CEO Elon Musk, and researcher Ilya Sutskever. The lab was originally a nonprofit organization to focus on AI research and development, but when Musk left the company in 2018, Altman turned OpenAI into a for-profit company to raise the money needed for research.

In 2020, OpenAI created the GPT-3 system, which can autonomously generate text, including tweets, blog posts, news articles, and even computer code.

ChatGPT is based on the same technology as GPT-3, and it's gotten a lot of attention as people have started using it for everything from helping them find answers to quizzes to writing term papers.

In a recent interesting experiment, ChatGPT managed to fool HR people at the communications-consulting company Schwa. The program applied for a job and wrote a test assignment better than 80 percent of applicants, and the company's HR people, not knowing they were dealing with AI, even intended to invite him to an “in person interview”.

ChatGPT also recently passed a final exam at one of the best business schools in the world. According to the instructor, on the real exam, ChatGPT would have received a grade of "B" to "B-." Of course, that's not the highest grade, but it is a passing one.

The chatbot also performed well on legal documents. Many experts think the ChatGPT technology is very, very promising. They are confident that in a few years, the chatbot will have capabilities that are hard to imagine today.

In 2022, OpenAI also introduced another interesting technology – AI DALL-E, which allows anyone to create photorealistic images based on text descriptions.

OpenAI and Microsoft

Microsoft's partnership with OpenAI has a long history. Microsoft invested $1 billion in the company in 2019 and another $2 billion over the next few years. These funds were invested in the massive computing power needed to build generative AI.

In 2020, Microsoft acquired an exclusive license for the technology behind the GPT-3 AI model.

The company's new investment in this lab further underscores the importance of OpenAI technology for Microsoft's future; AI technology could give the company a significant competitive advantage over other major technology companies, including Google, Meta, and Apple.

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

According to some reports, Microsoft is planning to integrate ChatGPT into its search engine Bing (which will challenge Google, the most popular search engine today). The same search engine is said to be planning to add a DALL-E 2 text-based image creation system.

The company may also integrate some AI language technology into Word, PowerPoint, and Outlook applications. All of this could make Microsoft products much more appealing to consumers.

“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,” said Satya Nadella, Chairman and CEO, of Microsoft. “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 deal follows Microsoft's announcement of nearly 10,000 job cuts. According to Nadella, the cuts will allow the company to refocus on priorities such as AI, which he called the next big wave of computing.