Microsoft is going to invest more in OpenAI as the tech race progresses

23 Jan. (Reuters) – Microsoft Corp. (MSFT.O) announced a further multi-billion dollar investment in OpenAI on Monday, cementing ties with the startup behind chatbot sensation ChatGPT and paving the way for more competition with rival Alphabet Inc’s (GOOGL) .o) Google.

Microsoft recently touted a revolution in artificial intelligence (AI), building on a bet it made on OpenAI nearly four years ago, when it spent $1 billion on the startup co-founded by Elon Musk and investor Sam Altman.

It has since built a supercomputer to power OpenAI’s technology, among other things.

Microsoft has now announced in a blog post “the third phase” of its collaboration “through a multi-year, multibillion-dollar investment,” including additional supercomputing development and cloud computing support for OpenAI.

Both companies will be able to commercialize the resulting AI technology, the blog post said.

A Microsoft spokesperson declined to comment on the terms of the latest investment, which some media outlets previously reported would amount to $10 billion.

Microsoft is devoting even more resources to putting the two companies at the forefront of artificial intelligence through 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 demand, is the main example that received a lot of attention in Silicon Valley last year.

Microsoft said last week it planned to integrate such AI into all of its products as OpenAI continues to create human-like intelligence for machines.

Microsoft has begun adding OpenAI’s technology to its search engine Bing, which is being discussed for the first time in years as a potential rival to Google, the market leader.

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

Microsoft’s bet comes days after and Alphabet each announced layoffs of 10,000 or more employees. Redmond, Washington-based Microsoft warned of a recession and growing scrutiny of customer digital spending in its announcement of the layoff.

Reporting by Jeffrey Dastin in Palo Alto, California; Additional reporting by Eva Mathews in Bengaluru; Edited by Krishna Chandra Eluri, Kirsten Donovan and Jan Harvey

Our Standards: The Thomson Reuters Principles of Trust.

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