(Reuters) – Microsoft Corp. said on Monday that it invested $ 1 billion in the San Francisco-based OpenAI, and that the two had formed a multi-year partnership to develop supercomputer technology for artificial intelligence on Microsoft's Azure cloud computing service.
FILE PHOTO: The Microsoft character is shown at the top of the Microsoft Theater in Los Angeles, California, USA October 19, 2018. REUTERS / Mike Blake / File Photo
OpenAI was founded in 2015 as an ideal for $ 1 billion in financing from Silicon Valley investors Sam Altman, Peter Thiel and LinkedIn co-founded Reid Hoffman, among others. Earlier this year, the Group created a related for-profit unit to invest in external investments.
Since its inception, OpenAI has used artificial intelligence scientists to make advances in the field, such as teaching a robot hand to carry out human tasks entirely in software, cutting costs and time to train robots.
The group has also focused on the safety and social consequences of AI, and examines how computers can generate realistic news stories with little more than headline suggestions and warning researchers to consider how their work and algorithms can be abused by bad actors before they are published.
OpenAI said the Microsoft investment would help it pursue "artificial general intelligence" or AGI. An AGI is the holy grail of the field and will mean that the computing system can master a subject as well or better than the best people in the world – and master more fields than any single human being.
"We believe it is crucial that AGI is put into operation safely and securely, and that its economic benefits are widely distributed," Altman said in a statement. "We are excited about how deeply Microsoft shares this vision."
Microsoft said the two companies would jointly build new AI technologies on Microsoft's Azure cloud computing service. The two also said that OpenAI would move many, but not all, of its services to Azure and that Microsoft would be its "preferred" partner to commercialize new services.
The two parties refused to answer questions from Reuters about the terms of the agreement. Earlier this year, OpenAI created a profit-making partnership to take out investments. The for-profit unit is ultimately controlled by the non-profit organization.
When OpenAI created the structure in March, investors who put money into the for-profit unit said they would get their returns and that the idea of the ideas would take precedence over to win.
Microsoft and OpenAI refused to answer questions about whether and how Microsoft's return on investment of $ 1 billion would be truncated or how any revenue and profits from jointly developed technologies would be shared.
The two companies also refused to say whether Microsoft's investment would be made in cash or whether it would involve credits for the Azure cloud computing service.
Cloud computing services are a major expense for OpenAI, which spent $ 7.9 million on cloud computing in the 2017 tax year, or about a quarter of its total operating expenses for that year, according to US Internal Revenue Service submissions.
Reporting Stephen Nellis in San Francisco; Editing by Peter Cooney