Microsoft mulls a far larger stake in OpenAI, plans to add ChatGPT on Azure

Apparently the software giant is in discussions to invest as much as US$10 billion in OpenAI, the creator of ChatGPT.
17 January 2023

In 2019, Microsoft made a US$1 billion bet on OpenAI, the San Francisco company that designed ChatGPT, while announcing a multi-year “exclusive computing partnership.” The partnership includes the two companies building new AI supercomputing technologies for Microsoft’s Azure cloud platform, and OpenAI will also port its existing services to work on Azure.

At the same time, Microsoft officially became “OpenAI’s preferred partner” for the commercialization of any new AI technologies it develops in the future. Later that year, the software giant invested another US$2 billion, but it was kept under wraps, according to people familiar with the matter. The total US$3 billion Microsoft paid is for the huge amounts of computing power that OpenAI needed to build the chatbot. 

For Microsoft, it means that the software giant could rapidly build and deploy new products based on the technology. Microsoft sees these technologies as a way of expanding and improving its already wide range of products for businesses, computer programmers and consumers, while boosting revenues across its Azure cloud computing services.

General availability of Azure OpenAI Service expands access to large, advanced AI models with added enterprise benefits.Source: Microsoft

General availability of Azure OpenAI Service expands access to large, advanced AI models with added enterprise benefits.
Source: Microsoft

Building on that existing relationship between the two companies, as Microsoft mulls taking a far larger stake in OpenAI, the company this week announced that it will add OpenAI’s artificial intelligence bot ChatGPT to its cloud-based Azure service “soon.” Its Azure OpenAI service has been available to a limited set of customers since it was unveiled in 2021 but it wasn’t until yesterday that Microsoft announced the broad availability of the service. 

The service gives the software giant’s cloud customers access to various OpenAI tools like the GPT-3.5 language system on which ChatGPT is based, as well as the Dall-E model for generating images from text prompts, the company said in a blog post. That enables Azure customers to use the OpenAI products in their own applications running in the cloud. On top of the general availability, a report by Bloomberg also indicated that Microsoft is in discussions to invest as much as US$10 billion in OpenAI, quoting people familiar with its plans. 

What Microsoft ultimately wants is to get an inside edge on the most popular and advanced AI systems in order to boost its own products in competition with Alphabet Inc.’s Google, Amazon.com Inc. and Meta Platforms Inc. “We are confident in the quality of the AI models we are using and offering customers today. The pace of innovation in the AI community is moving at lightning speed. We’re tremendously excited to be at the forefront of these advancements with our customers, and look forward to helping more people benefit from them in 2023 and beyond,” Microsoft said in its blog posting.

When ChatGPT was launched at the end of November, the sensational AI service received its first million users in less than a week. As Bloomberg puts it, “its imitation of human conversation sparked speculation about its potential to supplant professional writers and even threaten Google’s core search business. The organization behind it, co-founded by Elon Musk and Silicon Valley investor Sam Altman, makes money by charging developers to license its technology.”