Breaking News: Microsoft Makes Multibillion Dollar Investment in OpenAI
Azure will be the exclusive cloud provider for OpenAI
Microsoft announced today that it had completed its third investment in OpenAI but declined to specify the funding amount.
Today, we are announcing the third phase of our long-term partnership with OpenAI through a multiyear, multibillion dollar investment to accelerate AI breakthroughs to ensure these benefits are broadly shared with the world.
Synthedia has written recently about Microsoft’s intention to provide new funding to OpenAI, and some details surround the intended deal structure. These included a claim by Microsoft on 75% of OpenAI’s future profits until the investment is recouped. It is unclear today whether that clause was in the final funding agreement.
Azure Exclusivity
What Microsoft did say is that Azure will be the:
Exclusive cloud provider – As OpenAI’s exclusive cloud provider, Azure will power all OpenAI workloads across research, products and API services.
This is interesting because OpenAI CEO Sam Altman last week answered an interviewer’s question by saying that the Microsoft deal was not exclusive. This new deal may have changed that, or he may have been sidestepping the question by trying to indicate that the use of OpenAI technology was not exclusive.
Microsoft also said it would increase investment in supercomputing systems “to accelerate OpenAI’s groundbreaking independent AI research.” And the company reaffirmed it would deploy OpenAI services across its product lines, including the OpenAI Azure service announced last week.
There was no mention of whether the investment was paid for in cash, Azure computing credits, or a combination of the two. However, this is much an Azure story as an OpenAI story.
Why This Matters
The announcement was not exactly a surprise, given all of the leaks in recent weeks. However, it is important because it would seem to ensure that OpenAI is well enough funded to continue developing and expanding the market availability of its products. There are many companies right now building applications on top of GPT-3. This news should give them confidence that OpenAI will not face a cash crunch soon.
It is also a big deal for Microsoft and Google. Battle lines are now clearly drawn. Let the generative AI wars commence. More on this in tomorrow’s post!
