Microsoft will invest more in OpenAI as the technology race heats up

Jan 23 (Reuters) – Microsoft Corp ( MSFT.O ) on Monday announced a further multibillion-dollar investment in OpenAI, deepening ties with the startup behind chat sensation ChatGPT and setting the stage for greater competition with rival Alphabet Inc ( GOOGL.O ) Google.

Recently heralding an artificial intelligence (AI) revolution, Microsoft is building on the bet it made on OpenAI nearly four years ago, when it committed $1 billion to the startup co-founded by Elon Musk and investor Sam Altman.

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

In a blog post, Microsoft has now announced a “third phase” of its partnership “through a multi-year, multi-billion dollar investment,” including additional supercomputer development and cloud computing support for OpenAI.

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

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

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

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

Microsoft said last week that it aims to build such artificial intelligence into all of its products, as OpenAI continues to strive to create human-like intelligence for machines.

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

The long-awaited investment shows how Microsoft is closing in on competition with Google, the inventor of key artificial intelligence research that is planning an unveiling this spring, a person familiar with the matter previously told Reuters.

Microsoft’s bet comes days after Alphabet announced layoffs of 10,000 or more workers. Redmond, Washington-based Microsoft warned of the recession and increasing control of digital spending by customers in its layoff announcement.

Reporting by Jeffrey Dustin in Palo Alto, Calif.; Additional reporting by Eva Mathews in Bengaluru; Editing by Krishna Chandra Elluri, Kirsten Donovan and Jan Harvey

Our Standards: Thomson Reuters Trust Principles.

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