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- 🤖 Revealed: Why Microsoft Invested Heavily in OpenAI
Good morning and welcome to the latest edition of neonpulse!
Today, we’re talking about the reason behind Microsofts $1 Billion investment in OpenAI back in 2019 👀
Microsoft’s OpenAI Investment: A Race to
Catch Up with Google
Microsoft's $1 billion investment in OpenAI in 2019 was heavily influenced by concerns that Google was significantly ahead in AI development, according to internal emails revealed during the ongoing US Justice Department antitrust case against Google. These communications show high-level discussions between Microsoft CTO Kevin Scott, CEO Satya Nadella, and co-founder Bill Gates, highlighting Microsoft's urgency to catch up in the AI race.
In an email dated June 12, 2019 (which you can see redacted versions of here) Scott expressed concerns about Microsoft's AI capabilities, particularly in machine learning scale and infrastructure, which he felt were lagging behind Google's advancements. This was evidenced by Microsoft's struggle to replicate and train Google’s BERT language model, which took half a year due to infrastructure inadequacies.
Scott also acknowledged Google's early AI applications, such as its autocomplete features in Gmail, which were becoming increasingly sophisticated and giving Google a competitive edge, particularly against Microsoft’s Bing search engine. This realization prompted Microsoft to reconsider its position and strategy concerning AI development.
The decision to invest in OpenAI was part of a strategic pivot to bolster Microsoft's AI capabilities. This move was supported by Nadella, who saw the partnership with OpenAI as crucial for closing the technology gap with Google. Microsoft CFO Amy Hood was also looped into the discussions, underscoring the financial and strategic importance of this investment.
Since then, Microsoft has significantly increased its investment in OpenAI, totaling more than $13 billion. This funding has integrated OpenAI’s models across Microsoft’s product suite, including Office applications, the Bing search engine, the Edge browser, and the Windows operating system. These integrations have not only enhanced Microsoft's products but have also repositioned the company as a leader in AI, a stark contrast to its prior status.
As AI continues to be a primary focus for Microsoft in 2024 and beyond, with Nadella recently prioritizing AI and security, the company seems well-positioned to maintain its competitive edge in the AI race 👀
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