What the OpenAI revolution means for Microsoft

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Tit’s a mission continues,” tweeted Sam Altman, co-founder of OpenAIthe beginning behind ChatGPT, on November 19. But it is not clear where he will continue. Mr. Altman’s tweet was part of the announcement that he was joining Microsoft. Two days earlier, to the surprise of Silicon Valley, he was kicked out of Openai for not being “regularly open in his communication with the board”. Then Satya Nadella, the head of Microsoft, announced that Mr. Altman would “lead a new progressive AI [artificial intelligence] research team” within the tech giant. At first it seemed likely that Mr. Altman would be joined by only a few former colleagues. Many others may follow. Most of OpenAIThe 770 employees have signed a letter threatening to resign if the board does not reinstate Mr. Altman.

The shenanigans involving the world’s hottest startup are not over. The Verge, an online publication focused on technology, has reported that Mr. Altman may be willing to return to the OpenAI, if the members of the board responsible for the dismissal are retiring. Mr. Nadella also seems to allow that possibility. His move could look smart either way. If Mr. Altman returns, then Microsoft, Openaithe largest investor, has supported him in times of crisis, strengthening an important corporate relationship. If Mr. Altman and his friends join Microsoft, Mr. Nadella could look even smarter. It would have brought in the talent and technology that the second most valuable company in the world is betting on the future.

Microsoft has long invested in various forms of AI. They first announced that they were working with OpenAI in 2016, and has since invested $13bn in the startup for a reported 49% stake. The agreement means that OpenaiTechnology must run on Azure, Microsoft’s cloud computing arm. In exchange for OpenAI it has access to a large amount of Microsoft processing power, which it needs to “train” its powerful models.

The investment became crucial for Microsoft a year ago when Chat was launchedGPT. The chatbot became the fastest growing consumer software application in history, reaching 100m users in two months. Since then Microsoft has been busy working out how to incorporate the startup’s technology into its software. He has launched ChatGPT-like bots to run alongside many of its offerings, including its productivity tools, such as Word and Excel; Bing, its search engine; and even its Windows operating system.

Bringing parts of OpenAI the interior would be a smart move. The technology is at the heart of Microsoft’s future. Having direct control over it will eliminate the danger that is OpenAI he could take his technology in another direction. And such an effect would be achieved for a bargain. Before he was fired, Mr. Altman hoped to raise new funds for OpenAI that would value the company at around $86bn. Hiring OpenAIand boffins like this are something that would be more difficult for regulators to trust than to get a straight lift. Investors seem to like it. Microsoft’s share price fell slightly on the news of Mr. Altman’s firing. That loss was reversed when his new gig was announced.

But there would also be risks involved in the move. One of them is famous. There is a column of Microsoft AI It’s a strategy to keep the technology at arm’s length, thus protecting him from any embarrassment caused when ChatGPT leaving Contrast that when Meta, Facebook’s parent company, Galactica, released its science AI chatbot, the machine started to search. The public response was critical enough to bring Meta down.

Some analysts believe that Microsoft may not need insulation more. He has invested heavily in management AI risks, with teams working on issues including security, privacy and limiting inappropriate behaviour. Microsoft’s version of OpenAIand GPT models come with more guardrails than starters, notes Mark Moerdler of Bernstein, a broker. The company is launching its own Chat seriesGPT-Results are similar to suggest that he is confident that he can manage some of the fame.

Risk is greater than an Open moveAI The inside “could create a short-term slowdown in the progress of the technology,” says Mr. Moerdler. A team led by Mr. Altman within Microsoft would take time to get started because new models need to be designed and trained. If it is openAI have lost their brightest employees in the meantime, who could improve their new products that Microsoft still depends on to develop their software.

The third threat is that Openaitalent does not go to Microsoft, but somewhere else entirely. Marc Benioff, the head of Salesforce, another software company, has said he would hire any OpenAI a retired researcher.

Whether they flee elsewhere will depend to some extent on the exact condition of Mr. Altman’s new clothes. Early signs suggest that it may be enough independence. Mr. Nadella referred to Mr. Altman as “CEO” of the new unit. Barry Briggs, from Directions on Microsoft, a consultancy, points out that Microsoft has tended to give away new autonomy for acquisitions in the past, citing the experiences of LinkedIn and GitHub in 2016 and 2018. .

The stakes this time are much higher: Openaitalent is in high demand and its technology is critical to Microsoft’s future. Mr. Nadella will hope that he has secured his company’s interests, whether Mr. Altman takes his new job or returns to the startup he founded.. But the chaos is not over yet.

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