Microsoft will invest more in OpenAI as the technology race heats up

Jan 23 (Reuters) – Microsoft Corp ( MSFT.O ) on Monday announced a further multibillion-dollar investment in OpenAI, deepening ties with the startup behind chatbot sensation ChatGPT and setting the stage for more competition with rival Alphabet Incs ( GOOGL.O ) Google.

Microsoft, which recently heralded a revolution in artificial intelligence (AI), is building on a bet it made on OpenAI nearly four years ago, when it dedicated $1[ads1] billion to the startup founded by Elon Musk and investor Sam Altman.

It 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 the partnership “through a multi-year, multi-billion dollar investment”, including further supercomputer development and cloud computing support for OpenAI.

Both companies will be able to commercialize the resulting AI technology, the blog post says.

A Microsoft spokesperson declined to comment on the terms of the latest investment, which some media previously reported would be $10 billion.

Microsoft is devoting even more resources to keeping the two companies at the forefront of artificial intelligence via so-called generative AI, technology that can learn from data how to create virtually any type of content just from a text message.

OpenAI’s ChatGPT, which produces prose or poetry on command, is the prime example that gained widespread attention in Silicon Valley last year.

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

Microsoft has begun adding OpenAI’s technology to its Bing search engine, which for the first time in years is being discussed as a potential rival to Google, the industry leader.

The widely anticipated investment shows how Microsoft is locked in competition with Google, the inventor of key AI research that is planning its own unveiling this spring, a person familiar with the matter told Reuters earlier.

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

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

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