Microsoft Announces Further Multibillion Dollar Investment in OpenAI as Competition Heats Up

Microsoft Corp on Monday announced a further multibillion dollar investment in OpenAI, deepening ties with the startup behind the chatbot sensation ChatGPT and setting the stage for more competition with rival Alphabet Inc's Google.

Recently touting a revolution in artificial intelligence (AI), Microsoft is building on a bet it made on OpenAI nearly four years ago, when it dedicated $1 billion (roughly Rs. 8,200 crore) for the startup co-founded by Elon Musk and investor Sam Altman.

It has since built a supercomputer to power OpenAI's technology, among other forms of support.

Microsoft in a blog post has now announced "the third phase" of its partnership "through a multiyear, multibillion dollar investment" including additional supercomputer development and cloud-computing support for OpenAI.

Both companies will be able to commercialize the AI tech that results, the blog post said.

A Microsoft spokesperson declined to comment on the terms of the latest investment, which some media outlets earlier reported would be $10 billion (roughly Rs. 82,000 crore).

Microsoft is committing even more resources to keep the two companies at the forefront of artificial intelligence via so-called generative AI, technology that can learn from data how to create virtually any type of content simply from a text prompt.

OpenAI's ChatGPT, which produces prose or poetry on command, is the prime example that last year gained widespread attention in Silicon Valley.

Microsoft last week said it aimed to imbue such AI into all its products, as OpenAI continues to pursue the creation of human-like intelligence for machines.

Microsoft has started adding OpenAI's tech to its search engine Bing, which for the first time in years is being discussed as a potential rival to Google, the industry leader.

The widely anticipated investment shows how Microsoft is locked in competition with Google, the inventor of key AI research that is planning its own unveil for this spring, a person familiar with the matter previously told Reuters.

Microsoft's bet comes days after it and Alphabet each announced layoffs of 10,000 or more workers. Redmond, Washington-based Microsoft warned of a recession and growing scrutiny of digital spend by customers in its layoff announcement.

© Thomson Reuters 2023

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