Microsoft announces multibillion-dollar investment in ChatGPT-maker OpenAI

Agreement aims to accelerate artificial intelligence breakthroughs

Microsoft announced laying off 10,000 of its 221,000 employees to adjust to changing macroeconomics and to cut overall costs at the tech giant, amid a wave of industry layoffs. AP
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Technology company Microsoft has announced the third phase of its long-term partnership with ChatGPT-maker OpenAI through a new multiyear, multibillion-dollar investment.

The agreement follows Microsoft’s previous investments in the company in 2019 and 2021. It aims to accelerate artificial intelligence breakthroughs to ensure the benefits are broadly shared with the world, Microsoft said.

Microsoft did not disclose the exact dollar amount of the investment, but news website Semafor reported earlier this month that the Washington state-based company was in discussion to invest nearly $10 billion in OpenAI.

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Microsoft shares our values and we are excited to continue our independent research and work toward creating advanced AI that benefits everyone
Sam Altman, chief executive of OpenAI

The new investment “extends our ongoing collaboration across AI supercomputing and research … and enables each of us to independently commercialise the resulting advanced AI technologies”, the company said.

Satya Nadella, chairman and chief executive of Microsoft, said: "We formed our partnership with OpenAI around a shared ambition to responsibly advance cutting-edge AI research and democratise AI as a new technology platform.

“In this next phase of our partnership, developers and organisations across industries will have access to the best AI infrastructure, models and toolchain with Azure to build and run their applications.”

OpenAI works closely with Microsoft’s cloud computing service Azure. In 2019, Microsoft invested $1 billion in the company.

 Satya Nadella, chairman and chief executive of Microsoft. EPA

Microsoft said it will increase its investments in the development and use of supercomputing systems to accelerate OpenAI’s independent AI research. The company will deploy OpenAI’s models across its consumer and enterprise products and introduce new categories of digital experiences built on OpenAI’s technology.

Sam Altman, chief executive of OpenAI, said: The past three years of our partnership have been great.

“Microsoft shares our values and we are excited to continue our independent research and work towards creating advanced AI that benefits everyone."

Since 2016, Microsoft has committed to build Azure into an AI supercomputer for the world, serving as the foundation of its vision to democratise AI as a platform.

Microsoft and OpenAI have pushed the frontier of cloud supercomputing technology, announcing one of the top five publicly disclosed supercomputers in the world in 2020. The supercomputer hosted in Azure was designed specifically to train the company’s AI models.

San Francisco-based OpenAI is a research company that says its mission is to ensure that AI benefits humanity. It was co-founded by Elon Musk, the owner of Twitter, chief executive of electric car maker Tesla and co-founder of neurotechnology company Neuralink, but he left the company in 2018 after disagreements over its direction.

Its new AI-based chatbot called ChatGPT has been creating a stir across the internet with its writing ability and responses to requests.

ChatGPT is a programme that comes up with human-like responses to prompts in seconds, based on information publicly available on the internet. The programme has become hugely popular since its launch in December, while also raising concerns about what it is being used for and its accuracy.

For some professionals, it has provided a new dimension to their job and has proven to be a valuable assistant.

OpenAI is in talks to sell shares in a tender offering valuing it at about $29 billion, The Wall Street Journal reported.

Microsoft's stock, which has dropped more than 20 per cent in the past year, jumped almost 1.67 per cent to trade at $244.16 a share on Monday.

Microsoft’s latest investment comes as the tech giant laying off 4.5 per cent of the company's total employee base.

Last week, the company said it was laying off 10,000 of its 221,000 employees to adjust to changing macroeconomics and to cut overall costs at the tech giant, amid a wave of industry layoffs.

The job cuts will conclude by the end of March, chief executive Mr Nadella said in a note to employees.

Updated: January 24, 2023, 10:28 AM
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