Microsoft is betting big on the creator of ChatGPT in the Race to Dominate AI

OpenAI is led by Sam Altman, who became well known in Silicon Valley as head of startup builder Y Combinator. Mr. Altman, 37, and his co-founders created OpenAI in 2015 as a nonprofit organization. But he soon turned the venture into a for-profit company that could more aggressively seek financing.

A year later, Microsoft invested $1 billion in the company and committed to building the supercomputing technology OpenAI’s massive models would require, while becoming its “preferred partner for commercializing” the technologies. OpenAI later officially licensed its technologies to Microsoft, allowing the company to add them directly to Microsoft products and services.

With support from Microsoft, OpenAI went on to build a milestone technology called GPT-3. Known as a “large language model”, it can generate text on its own, including tweets, blog posts, news articles and even computer code.

Clumsy to use, it was mostly a tool for businesses and engineers. But a year later, OpenAI began work on DALL-E, which allowed anyone to generate realistic images by describing what they want to see. Microsoft incorporated GPT-3, DALL-E and similar technologies into its own products.

GitHub, a popular online service for programmers owned by Microsoft, started offering a programming tool called Copilot. As programmers built smartphone apps and other software, Copilot suggested the next line of code as they typed, much in the same way that autocomplete tools suggest the next word as you type texts or emails.

For many, it was a “shout-out moment” that showed what’s possible, Microsoft’s Mr. Boyd said.

Then, at the end of last year, OpenAI unveiled ChatGPT. More than a million people tested the chatbot in its first days online. It answered trivia questions, explained ideas and generated everything from school newspapers to pop song lyrics.