With Microsoft’s substantial financial resources and OpenAI’s cutting-edge AI, the two companies intend to continue to lead the field of generative artificial intelligence, which refers to systems that can produce text, images, and other types of media in response to brief commands.

Microsoft announced on Monday that it is investing “multi-years, billions of dollars” in OpenAI, the San Francisco artificial intelligence research center that created the ChatGPT online chatbot.


Microsoft and OpenAI

The particular financial details of the agreement were not disclosed by the parties, but a source with knowledge of the situation stated Microsoft will contribute ₹814,902,400,000 to OpenAI.

The new agreement is a blatant statement of the value of OpenAI’s technology to Microsoft’s future and its competition with other major tech companies like Google, Meta, and Apple. Microsoft had already committed more than  ₹244,264,782,000 in OpenAI.

The businesses seek to stay at the forefront of generative artificial intelligence — technology that can produce text, images, and other material in response to brief instructions — with Microsoft’s huge pockets and OpenAI’s cutting-edge artificial intelligence. ChatGPT, a chatbot that provides replies in concise, punctuated prose, gained notoriety after its unexpected launch at the end of November. It served as a metaphor for a new, more potent wave of AI.

These technologies, which are the result of more than ten years of research at organisations like OpenAI, Google, and Meta, are about to revolutionise everything from photo and graphics editors like Photoshop to online search engines like Google Search and Microsoft Bing.

Microsoft Layoff

The agreement comes after Microsoft revealed last week that it has started laying off staff as part of a plan to eliminate 10,000 positions. It estimated that the adjustments, which would include severance pay, lease terminations, and “changes to our hardware portfolio,” would cost ₹97 thousand crore .


Developers and organisations from all industries would have access to the greatest AI infrastructure, models, and tool chain, Nadella stated in his company’s statement on Monday. This will be the main focus of the partnership’s upcoming phase with OpenAI.

A small group of AI researchers and entrepreneurs, including Elon Musk, the billionaire CEO of the electric vehicle manufacturer Tesla, Sam Altman, the head of startup incubator Y Combinator, and Ilya Sutskever, one of the most significant researchers of the previous ten years, founded OpenAI in 2015.

They established the lab as a nonprofit company. However, Altman restructured OpenAI as a for-profit business after Musk departed the project in 2018 so that it could raise the funding required for its research.

Microsoft made a  ₹81,788,852,000.00 investment in the business a year later; over the subsequent few years, it made a hidden $2 billion investment. With the help of these funds, OpenAI was able to develop the generative AI technologies for which it is well-known.

Additionally, OpenAI is attempting to finalise a deal in which it would sell its current shares in a “tender offer.” According to two people with knowledge of the conversations, this might amount to ₹24 billion and would value the company at roughly ₹2 billion, depending on how many employees agree to sell their ownership.

A ground-breaking artificial intelligence (AI) system named GPT-3 was developed by OpenAI in 2020. It was capable of automatically producing text, including tweets, blog posts, news stories, and even computer code. In the past year, it unveiled DALL-E, a tool that enables anyone to create photorealistic photos by simply expressing what they want to see.

Credits: Microsoft Via Twitter


ChatGPT, which utilised the same technology as GPT-3, demonstrated to the general public the potential power of this technology. During the chatbot’s initial few days online, over a million individuals tested it out, using it to write everything from poetry to term papers, answer trivia questions, and explain concepts.

GPT-3, DALL-E, and other OpenAI technologies have already been implemented by Microsoft into its own products. In particular, Microsoft-owned GitHub, a well-known website for programmers, provides a tool called Copilot that may generate code snippets automatically.

Several OpenAI services were made more accessible to users of Microsoft’s Azure cloud computing platform last week, while ChatGPT was announced as “coming soon.”

Economy in Tech world

Investors anticipate that the challenging economic climate, which includes decreased personal computer sales and more restrained business spending, will further hurt revenues when the company announces its most recent quarterly results on Tuesday.

Since the end of the summer, Microsoft’s growth has slowed, and Wall Street experts anticipate that its most recent financial results will reveal its worst growth since 2016. However, the company continues to generate substantial earnings and cash. Through quarterly dividends and a ₹4 trillion share repurchase program authorised by its board in 2021, it has kept giving money back to investors.

Big Techies in AI

Better chatbots and programming assistants are not the only objectives Microsoft and OpenAI claim to have in mind.

The declared goal of OpenAI was to create an artificial general intelligence (AGI), or machine that can perform any task that a human brain can. When OpenAI announced its initial partnership with Microsoft in 2019, Nadella compared it to the company’s ambitions to develop a quantum computer, a device that would be exponentially faster than current computers, and described it as the kind of ambitious goal that a business like Microsoft should seek.

Whether it’s our goal of quantum computing or a pursuit of artificial general intelligence, he asserted, “I think you need these high-ambition North Stars.”

That is not necessarily a skill that researchers are proficient in developing. But many think that tools like ChatGPT are a way to achieve this challenging objective.

These technologies give Microsoft a way to grow its business, increase income, and compete with companies like Google and Meta that are also taking urgent action to address AI breakthroughs.

Alphabet (Google) CEO Sundar Pichai recently issued a “code red,” upending plans and accelerating the development of artificial intelligence. According to a slide presentation examined by The New York Times and two people with knowledge of the plans but who were not authorised to speak publicly, Google expects to introduce more than 20 products and show off a chatbot-enabled search engine this year.

But there are numerous drawbacks to the emerging AI technologies. They frequently create harmful content, such as propaganda, hate speech, and images that are prejudiced against women and people of colour.

Because they could hurt their already-strong brands, Microsoft, Google, Meta, and other firms have been hesitant to disclose many of these technologies. Microsoft introduced Tay, a chatbot, five years ago. Tay produced racist and xenophobic words, and it was swiftly taken down from the internet after user complaints.


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