Microsoft to invest more in OpenAI as tech race heats up

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

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

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

In a blog post, Microsoft has now announced “the 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 artificial intelligence technology, the blog says.

A Microsoft spokesperson declined to comment on the terms of the latest investment, which some media said is worth $10 billion.

Microsoft is committing even more resources to keep the two companies at the forefront of artificial intelligence through so-called generative AI, a 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 command, is the best example that caught the eye last year in Silicon Valley.

Microsoft said last week that it aims to embed such AI in all of its products, as OpenAI continues to pursue the creation of human-like intelligence for machines.

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

The widely anticipated investment shows just how much Microsoft competes with Google, the inventor of key AI research that plans its own unveiling for this spring, a person familiar with the matter told Reuters.

Microsoft’s bet comes days after, and Alphabet each announced layoffs of 10,000 or more workers. Microsoft, based in Redmond, Wash., warned of a recession and growing scrutiny of digital spending by customers in its layoff announcement.

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

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