Microsoft on Monday announced a “billion dollar” investment in OpenAI, the developer of a new artificial intelligence that powers text chatGPT. The agreement will allow the multinational company to incorporate OpenAI technology into its products, such as Office or the Bing search engine. Microsoft has not released an official figure for the deal, but multiple sources have leaked that it is worth $10 billion, with OpenAI’s total value at $29 billion.
The move is part of a major reformulation of Microsoft’s business strategy, which is committed to creating a new technology ecosystem based on artificial intelligence, such as ChatGPT and DALL-E, a system that generates images based on user-entered descriptions. by OpenAI. “These innovations have captured the imagination and established large-scale AI as a powerful general-purpose technology platform that we believe will create a transformative impact across the PC, the Internet, mobile devices and the cloud,” he explains. in release.
Microsoft also cited the turnaround to justify its decision last week to lay off 5% of its workforce. That equates to about 10,000 employees, and the settlements will cost it $1,200 million. “When I think about now, early 2023, I think that will be the time of the show. Both for our sector and for Microsoft”, said its president Satya Nadella.
The deal with OpenAI is the third it has signed with the developer, which was founded in 2015 by Elon Musk, Peter Thiel and other major Silicon Valley investors. In the previous two, Microsoft invested $1 billion to gain a position in the company and granted it unlimited access to Azure cloud computing systems, one of the most advanced in the world. Training AI models like ChatGPT requires working with huge databases, so access to Azure’s computing power has been a key competitive advantage for OpenAI.
“We are building our partnership with OpenAI around a shared ambition to responsibly advance cutting-edge AI research and democratize AI as a new technology platform,” Nadella said Monday. Access to the best AI infrastructure, models and toolchain to build and run their applications with Azure.
The tech giant closed its most recent quarterly balance sheet with net profit of $17.6 billion, down 14% from 2021. The decline was marked by a decline in Windows sales to PC makers, whose market has fallen significantly after booming during the pandemic. . Revenue from Azure grew by 24% and now represents half of the company’s revenue. However, its growth was less than the previous year (36%) and also among those using cloud services from Google or Amazon, strong competition that Microsoft wants to win thanks to its agreement with OpenAI.
“The last three years of our partnership have been great,” said Sam Altman, CEO of OpenAI. “Microsoft shares our values, and we’re excited to continue our independent research and work to create advanced artificial intelligence that benefits everyone.” OpenAI was originally formed as a “non-profit” research lab, but has become a private company that wants to revolutionize the digital services business using artificial intelligence. It expects a profit of $200 million in 2023 and $1 billion in 2024.
The markets received the announcement passively. Microsoft shares were up 1.7% at the close of this news. The multinational is waiting for competition regulators to approve other big investment deals it announced last year, including its $69 billion acquisition of video game maker Activision Blizzard, the biggest acquisition in tech history. condition.
Source: El Diario