Microsoft invests US$10 billion in ChatGPT maker OpenAI
- The deal will boost Microsoft’s Azure cloud, while providing OpenAI with supercomputers to run its complex AI models and fuel its research
- The deal has a complicated structure because investors in OpenAI are limited in their return since it is a capped-for profit company
Microsoft Corp is investing US$10 billion in OpenAI, whose artificial intelligence tool ChatGPT has lit up the internet since its introduction in November, amassing more than a million users within days and touching off a fresh debate over the role of AI in the workplace.
The new support, building on US$1 billion Microsoft poured into OpenAI in 2019 and another round in 2021, is intended to give Microsoft access to some of the most popular and advanced artificial intelligence systems. Microsoft is competing with Alphabet, Amazon.com. and Meta Platforms to dominate the fast-growing technology that generates text, images and other media in response to a short prompt.
At the same time, OpenAI needs Microsoft’s funding and cloud-computing power to crunch massive volumes of data and run the increasingly complex models that allow programmes like DALL-E to generate realistic images based on a handful of words, and ChatGPT to create astonishingly humanlike conversational text.
While Microsoft did not give details of the new investment, a person familiar with the discussions, who asked not to be identified because the information is not public, said it totals US$10 billion over multiple years.
The deal will give a boost to Microsoft’s Azure cloud, while providing OpenAI with additional specially designed supercomputers to run its complex AI models and fuel its research. Microsoft plans to use OpenAI’s models throughout consumer and corporate products and release new categories of products based on OpenAI’s work, the two companies said in blog posts.
The Azure usage fuelled by this deal is key for Microsoft as it battles to expand that business, said Bloomberg Intelligence analyst Anurag Rana. “This could even help Microsoft close the gap further with AWS,” he said, referring to Amazon’s market-leading cloud service.
OpenAI noted on Monday that it uses Microsoft’s cloud-based service Azure to train all of its models and that Microsoft’s investment will allow it to accelerate its independent research. Azure will remain the exclusive cloud provider for OpenAI, the company said.
As with Microsoft’s previous investment in OpenAI, much of the value of the deal will take the form of Microsoft giving OpenAI the Azure cloud-computing horsepower needed to run its AI systems, said two people familiar with the deal.