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Microsoft logo (left) and ChatGPT logo (right) reflecting the colors of the Microsoft logo

Microsoft deepened its high-stakes relationship with OpenAI.

What’s new: The tech giant confirmed rumors that it is boosting its investment in the research lab that created the ChatGPT large language model and other AI innovations.

What happened: Microsoft didn’t disclose financial details, but earlier this month anonymous sources had told the tech news site Semafor that the company would give OpenAI $10 billion. In exchange, Microsoft would receive 75 percent of the research startup’s revenue until it recoups the investment, after which it would own 49 percent of OpenAI. Microsoft began its partnership with OpenAI with a $1 billion investment in 2019, and another $2 billion sometime between 2019 and 2023. In those deals, Microsoft got first dibs on commercializing OpenAI’s models and OpenAI gained access to Microsoft’s vast computing resources.

  • Under the new arrangement, Microsoft plans to integrate OpenAI’s models into its consumer and enterprise products to launch new products based on OpenAI technology.
  • Microsoft’s Azure cloud service will enable developers to build custom products using future OpenAI models. Azure users currently have access to GPT-3.5, DALL-E 2, and the Codex code generator. Microsoft recently announced that Azure would offer ChatGPT.
  • Microsoft will provide additional cloud computing infrastructure to OpenAI to train and run its models.
  • The two companies will continue to cooperate on to advance safe and responsible AI.

Behind the news: Earlier this month, the tech-business news site The Information reported that Microsoft planned to launch a version of its Bing search service that uses ChatGPT to answer queries, and that it would integrate ChatGPT into the Microsoft Office suite of productivity applications. Google CEO Sundar Pichai reportedly was so spooked by ChatGPT’s potential to undermine his company’s dominant position in web search that he issued a company-wide directive to respond with AI-powered initiatives including chatbot-enhanced search.

Why it matters: Microsoft’s ongoing investments helps to validate the market value of OpenAI’s innovations (which some observers have questioned). The deal also may open a new chapter in the decades-long rivalry between Microsoft and Google —a chapter driven entirely by AI.

We’re thinking: Dramatic demonstrations of AI technology often lack a clear path to commercial use. When it comes to ChatGPT, we’re confident that practical uses are coming.


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