What Microsoft’s new investment in OpenAI means for Google

After weeks of anticipation, Microsoft confirmed on Monday that it plans a multi-billion dollar, multi-year investment in OpenAI, the startup behind ChatGPT and Dall-E 2. The move puts pressure on search engine giant Google.

Microsoft initially collaborated with the research institute in 2019, when it invested 1 billion. She then got the exclusive right to OpenAI’s GPT-3 basic language model in 2021. The New York Times reported that Microsoft’s new investment, revealed just days after the tech giant laid off 10,000 employees, will be $10 billion.

Microsoft said that with this partnership, it will intensify the development and deployment of specialized supercomputer systems to accelerate the R&D of OpenAI, which remains independent for now.

The vendor also plans to infuse the startup’s new models into its consumer and enterprise products. Meanwhile, he launched Azure OpenAI Services which allows companies to use the startup technologies to enrich their applications. Finally, Microsoft plans to power all OpenAI workloads across API research, products and services.

Since OpenAI introduced ChatGPT, a model-based application in November NLG able to write academic essays, code, answer a massive number of questions with seemingly well-informed answers, the system’s popularity rose worldwide, although concerns were raised about its accuracy and its ability to encourage plagiarism.

Microsoft is committed to AI

Despite reports from The New York Times and other outlets citing the $10 billion figure, a Microsoft spokesperson did not confirm the information with Techtarget. [propriétaire du MagIT]. “We are not disclosing financial details and terms of the deal, and we are not sharing other details about this expanded partnership,” he said.

Regardless of the context, namely a forced downsizing internally at Google and Amazon, Microsoft wants to hammer home its message, according to industry observers.

“Microsoft wants everyone to know that they are heavily involved in cutting-edge AI,” said Nemertes CEO and analyst Johna Till Johnson.

Additionally, Microsoft’s investment in OpenAI also allows the tech giant to take its time developing AI capabilities and not be under as much pressure to quickly realize value for its products and services, adds Will McKeon-White, analyst at Forrester.

So instead of trying to figure out which areas of AI need the most development or spot the most profitable technologies, Microsoft will let OpenAI lead the research activities, according to the Forrester analyst.

“Being able to trust a neutral third-party organization that all of this passes through is a good thing, and it makes sense to continue to fund it,” assures Will McKeon-White.

Waiting for Google

With Microsoft’s significant investment in OpenAI, many are wondering how Google will respond to this move and the popularity of ChatGPT itself.

Google is reportedly looking for ways to outcompete ChatGPT, which could threaten its search design. At the moment, Google’s work consists more in optimizing the results of its search engine, playing on the placement and highlighting of publications on the web according to given themes.

According to the New York Times, Sundar Pichai, CEO of Alphabet, Google’s parent company recently gets Google founders Larry Page and Sergey Brin to help plan and develop a new chatbot and image generation tool, reports also Times. Among other things, this will include calling its subsidiary DeepMind and continuing to develop Sparrow, a conversational agent that has been the subject of a disclosure university at the end of September 2022.

“The [les dirigeants de Google] are well aware that their mastery of content search will simply be destroyed if someone else has the ability to deliver high-performance AI [dans ce domaine] said Mr. Johnson.

Google did not immediately respond to a request for comment.

However, Google’s advantage over Microsoft is that it does not have to rely on external resources to develop new features within Google.AIshadow Johna Till Johnson.

“Historically, Microsoft buys, then closes and sometimes incorporates companies into its organization,” she says. “Google doesn’t tend to do that. They rely more on home grown products.”

Google’s biggest problem right now is that many of its generative AI products haven’t launched yet, McKeon-White said.

“They probably have products. It’s just that they’re not quite ready for primetime, they’re more conservative about their availability, or they’re actively integrating it into other systems,” he says.

A larger AI team

Google may also need to beef up its AI development team.

Compared to many other types of technology, the development of an AI requires “a lot of work”, the Forrester analyst continues.

“OpenAI has been very successful in expanding its talent pool,” he says, adding that the company is otherwise able to commit a large sum of money to a specific problem. On Twitter, Sam Altman, CEO and co-founder of OpenAI, praises the “density of talent” at his company, which has 375 employees.

In contrast, Google needs to spread its funding across all of its projects, which span the spectrum of AI technologies, according to McKeon-White.

“It’s really the difference between a small organization that is very well-funded and very focused, and a large company that has to take care of all the activities of a company,” says the analyst.

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