Palo Alto A few days after Microsoft announced the layoff of 10,000 employees, a billion dollar deal was announced. The company made a “multi-year, billion-dollar investment” in the company OpenAI, which developed products such as ChatGPT, Microsoft announced on Monday.
The investment amounts to ten billion dollars, reported the Bloomberg news agency, citing insiders. Microsoft had already invested a billion dollars in the start-up OpenAI. Microsoft CEO Satya Nadella will present his company’s latest quarterly figures on Tuesday.
ChatGPT is an application based on artificial intelligence. The system can respond to human text input. Simple knowledge questions can be answered on command, but computer code can also be written or business plans drawn up.
OpenAI said: “We look forward to continuing to work with Microsoft and to driving this progress.” The start-up started as a non-profit company.
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In the meantime, founder Sam Altman has changed the company structure so that part of the OpenAI team is allowed to generate profits. The company describes itself as a “limited profit” firm. This structure will remain after the investment by Microsoft. ChatGPT is currently available for free testing.
“Smart move in the global AI arms race”
Analysts, on the other hand, see the partnership for Microsoft as an opportunity to earn a lot of money. “With ChatGPT being one of the most innovative AI technologies in the industry, Microsoft is clearly aggressive on this front and doesn’t want to be left behind in this potentially game-changing AI investment,” said analyst Dan Ives of asset manager Wedbush.
At times Microsoft overslept many important future investments. That’s changing now. “We believe this strategic investment is a smart move in this global AI arms race,” Ives wrote.
Microsoft announced earlier this month that it intends to integrate ChatGPT into its Azure cloud service. In addition, Microsoft wants to make the service available to all of its business customers after the OpenAI applications were initially only available to selected users. The service gives Microsoft’s cloud customers access to various OpenAI tools such as the GPT 3.5 voice system on which ChatGPT is based and the DALL-E model for generating images from text prompts.
With agency material
More: Microsoft announces 10,000 job cuts this year