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Why Is Microsoft Investing Billions in ChatGPT?

OpenAI, the maker of ChatGPT, has announced a multi-year, multi-billion dollar investment from Microsoft.

In a blog post, OpenAI revealed that the investment allows it to continue its independent research and develop AI that is “increasingly safe, useful, and powerful”. Microsoft and OpenAI will continue to work together in a number of ways:

  • Collaborate to build a number of supercomputing platforms powered by Azure to train all of their models. To speed up the research, Microsoft will boost its investment in these systems.
  • Azure will continue to be the exclusive cloud provider for all OpenAI workloads across research, API, and products.
  • Deploy OpenAI’s technology through its API and the Azure OpenAI Services. This will enable developers to build on top of GPT, DALL·E, and Codex.


Why is Microsoft investing billions in OpenAI?

Microsoft is fighting an ongoing battle against other major tech firms that have been investing heavily in artificial intelligence systems.

Google, for example, has made significant investments in AI, and has integrated the technology into its operations in a variety of ways. That includes improving picture recognition for images, phrasing suggestions in Gmail, and navigation recommendations in Google Maps.

Microsoft’s investment in Open AI heavily strengthens its position in this AI battle.

Last week, Morgan Stanley analysts wrote that “the viral launch of ChatGPT has caused some investors to question whether this poses a new disruption threat to Google Search”. Although not confirmed, there is speculation that Microsoft will incorporate OpenAI’s technology to make Bing a serious contender to Google’s search monopoly.

The bigger picture

The news of a multi-billion dollar investment comes in the same week as Microsoft’s announcement that it is laying off 10,000 employees. That’s not a coincidence.

Copilot is a product developed by GitHub (owned by Microsoft) and powered by OpenAI technology. It assists software developers by providing prompts and recommendations based on the code they have previously written.

The optimistic view of this kind of product is that developers can use the technology to become more productive while AI takes care of repetitive, formulaic tasks. The bleaker view is that companies will use AI to reduce their costs by laying off employees.

The fact Microsoft invested billions in the same week it laid off thousands of employees only adds to the narrative that AI is replacing jobs. It proves that it is more important than ever for people to embrace technology and learn how to use AI tools to remain competitive in business and the workplace.

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