Microsoft Invests $1 Billion in OpenAI’s Mission to Build Artificial General Intelligence

Since its inception in 2015, OpenAI has been chasing the lofty goal of developing artificial general intelligence (AGI) for the benefit of all. But it turns …

Since its inception in 2015, OpenAI has been chasing the lofty goal of developing artificial general intelligence (AGI) for the benefit of all. But it turns out that doesn’t come cheap, so now Microsoft will pump $1 billion into OpenAI’s effort.

As smart as today’s best AI is, it still doesn’t have the kind of general intelligence humans are blessed with. Machines have reached superhuman performance in some specific tasks, but unlike us they’re not great at mastering multiple challenges or transferring their knowledge between different jobs.

Many in Silicon Valley believe that creating AGI will lead to a step-change in the capabilities of machines and potentially even usher in a technological singularity. When it was launched in 2015 by Elon Musk and Y Combinator chairman Sam Altman, OpenAI’s goal was to ensure such AGI was ushered into the world in a safe and responsible way without the malign influence of profit-seeking.

But that always looked like a tall order when faced with stiff competition from tech giants like Google, IBM, and Amazon, all happy to pour billions into AI research. Faced with that reality, OpenAI has undergone a significant metamorphosis in the last couple of years.

Musk stepped away last year, citing conflicts of interest as his electric car company Tesla invests in self-driving technology and disagreements over the direction of the organization. Earlier this year a for-profit arm was also spun off to enable OpenAI to raise investment in its effort to keep up.

A byzantine legal structure will supposedly bind the new company to the original mission of the nonprofit. OpenAI LP is controlled by OpenAI’s board and obligated to advance the nonprofit’s charter. Returns for investors are also capped at 100 times their stake, with any additional value going to the nonprofit, though that’s a highly ambitious target that needs to be hit before any limits on profiteering would kick in.

Now the new deal with Microsoft seems to open the door to starting to commercialize some of the intellectual property OpenAI has built up, while ensuring the company has access to the huge computing resources required to do top-level AI research.

In return for its $1 billion investment Microsoft will become the “exclusive” provider of cloud computing services to OpenAI, as well as its preferred partner for commercializing new AI technologies. The two companies will also work together to build “AI supercomputing technologies” into Microsoft’s Azure cloud services.

The deal makes clear sense for both companies. Microsoft has lagged behind its competitors when it comes to AI, which is becoming an increasingly important component of the cloud services it is vying with Amazon and Google to provide.

An exclusive partnership with OpenAI effectively provides Microsoft with a ready-made research and development arm to help design AI-ready cloud hardware and new AI products. And while the investment sounds significant, CEO Satya Nadella told the New York Times it won’t all come at once, and most of it will be spent on OpenAI’s computing resources and therefore come back to Microsoft.

For OpenAI, the cost of keeping up in deep learning’s processing arms race is a major concern, and the main driver behind its decision to go for-profit. The deal with Microsoft not only provides it with cash to rent computing time, but will also give it a chance to guide the development of the tech giant’s AI hardware.

The two companies talk about the deal in tellingly different ways. An OpenAI blog post is largely focused on expounding its long-term goal of achieving AGI and explaining how the deal will make this possible, whereas a press release from Microsoft seems keen to suggest it will boost Azure’s AI offerings.

Given that the consensus among leading experts is that AGI is probably still many decades away (if it’s even feasible or desirable in the first place) it seems likely that Microsoft’s vision for the deal will be realized first.

Image Credit: Microsoft

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Microsoft to invest $1 billion in San Francisco-based OpenAI

Microsoft Corporation has announced a multiyear partnership as well as a $1 billion investment in the San Francisco-based OpenAI in a bid to create …
microsoftmicrosoft

Satya Nadella, CEO, Microsoft

Microsoft Corporation has announced a multiyear partnership as well as a $1 billion investment in the San Francisco-based OpenAI in a bid to create ethical AI and expand Microsoft Azure’s abilities in AI systems.

“The creation of AGI will be the most important technological development in human history, with the potential to shape the trajectory of humanity,” said Sam Altman, CEO, OpenAI. “Our mission is to ensure that AGI technology benefits all of humanity, and we’re working with Microsoft to build the supercomputing foundation on which we’ll build AGI. We believe it’s crucial that AGI is deployed safely and securely and that its economic benefits are widely distributed. We are excited about how deeply Microsoft shares this vision.”

According to Microsoft, the partnership is expected to speed up breakthroughs in AI, propel OpenAI’s efforts in the creation of Artificial General Intelligence (AGI) and jointly build new Azure AI supercomputing technologies. It will see Microsoft becoming OpenAI’s partner for commercializing AI technologies.

“AI is one of the most transformative technologies of our time and has the potential to help solve many of our world’s most pressing challenges,” said Satya Nadella, CEO, Microsoft. “By bringing together OpenAI’s breakthrough technology with new Azure AI supercomputing technologies, our ambition is to democratize AI — while always keeping AI safety front and center — so everyone can benefit.”

Established in 2015 in San Francisco, OpenAI is a nonprofit AI research company. It started with $1 billion in funding from Silicon Valley investors Sam Altman, Peter Thiel and LinkedIn co-founder Reid Hoffman, among others. The group recently created a for-profit division for accepting outside investment.

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OpenAI Signs Exclusive Computing Partnership With Microsoft In $1 Billion Deal

Microsoft and OpenAI have signed a partnership for further extending Microsoft Azure’s capabilities in large-scale AI systems as part of a $1 billion …

Sam Altman and Satya Nadella

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  • Microsoft and OpenAI have signed a partnership for further extending Microsoft Azure’s capabilities in large-scale AI systems as part of a $1 billion deal

Microsoft and OpenAI have partnered to further extend Microsoft Azure’s capabilities in large-scale AI systems. And through this partnership, the companies will accelerate breakthroughs in AI and power OpenAI’s efforts to create artificial general intelligence (AGI).

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And the resulting enhancements to the Azure platform will also help developers building the next generation of AI applications. The partnership covers Microsoft and OpenAI jointly building new Azure AI supercomputing technologies, OpenAI porting its services to run on Microsoft Azure (used for creating new AI technologies and deliver on the promise of artificial general intelligence), and Microsoft becoming OpenAI’s preferred partner for commercializing new AI technologies.

The companies are also going to focus on building a computational platform in Azure of unprecedented scale, which will train and run increasingly advanced AI models, include hardware technologies that build on Microsoft’s supercomputing technology and adhere to the shared principles on ethics and trust of both companies. Plus this will create the foundation for advancements in AI to be implemented in a safe, secure and trustworthy way and is a critical reason the companies chose to partner together.

“AI is one of the most transformative technologies of our time and has the potential to help solve many of our world’s most pressing challenges,” said Microsoft CEO Satya Nadella. “By bringing together OpenAI’s breakthrough technology with new Azure AI supercomputing technologies, our ambition is to democratize AI — while always keeping AI safety front and center — so everyone can benefit.”

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Over the past decade, innovative applications of deep neural networks coupled with increasing computational power have led to continuous AI breakthroughs in areas like vision, speech, language processing, translation, robotic control, and gaming.

Modern AI systems work best for the specific problem on which they’ve been trained. However, getting AI systems to help address some of the hardest problems facing the world today will require generalization and deep mastery of multiple AI technologies. And OpenAI and Microsoft’s vision is for artificial general intelligence to work with people to help solve currently intractable multidisciplinary problems, including global challenges such as climate change, more personalized healthcare and education.

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“The creation of AGI will be the most important technological development in human history, with the potential to shape the trajectory of humanity,” added Sam Altman — the CEO of OpenAI. “Our mission is to ensure that AGI technology benefits all of humanity, and we’re working with Microsoft to build the supercomputing foundation on which we’ll build AGI. We believe it’s crucial that AGI is deployed safely and securely and that its economic benefits are widely distributed. We are excited about how deeply Microsoft shares this vision.”

OpenAI was originally set up in October 2015 by Altman, Tesla Motors and SpaceX CEO Elon Musk, and several other investors. Ilya Sutskever (former Google research scientist) is currently serving as the co-founder and chief scientist of OpenAI. And Greg Brockman (former CTO of Stripe) is serving as co-founder and CTO of OpenAI. Some of the other backers in OpenAI include Reid Hoffman (LinkedIn co-founder), Peter Thiel (PayPal co-founder), and Jessica Livingston (founding partner of Y Combinator).

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Microsoft disguises exclusive Azure deal as $1bn OpenAI investment

Microsoft has announced a $1bn investment into OpenAI, the non-profit AI research project that counts Elon Musk among its founders, and signed a …

Microsoft has announced a $1bn investment into OpenAI, the non-profit AI research project that counts Elon Musk among its founders, and signed a completely totally separate honest-to-goodness “exclusive computing partnership” that will see Microsoft become the sole provider of computing resources for OpenAI. But because OpenAI is a non-profit, Microsoft can’t really just give the firm $1 billion, and so, the investment looks like a somewhat roundabout way to pay for the Azure instances that OpenAI is going to be using. There’s still an element of philanthropy here, but Microsoft wants to get in at the forefront of this AI research, which should have some beneficial effect on the combined Azure platform – which now represents around a third of…

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Microsoft Invests $1 Billion in OpenAI and Settles Bribery Charges

Microsoft’s investment of $1 billion in OpenAI is a development that has taken the tech space by storm. The investment underscores the company’s …

Microsoft invests $1 billion in OpenAI

Microsoft’s investment of $1 billion in OpenAI is a development that has taken the tech space by storm. The investment underscores the company’s focus on artificial intelligence innovations. Likewise, the strategic partnerships underscore the two firms’ resolve to advance current AI systems to address complex tasks.

Under the terms of the agreement, the two are to work on new supercomputing technologies. In return, Microsoft will become the exclusive cloud provider for OpenAI. This strategic partnership could not have come at a better time. For starters, the artificial intelligence market is estimated to grow at a CAGR of 55.6% between 2018 and 2025, reports Allied Market Research. Likewise, the market size is poised to reach $169.4 billion by 2025.

Founded by Tesla (TSLA) co-founder Elon Musk and Sam Altman, OpenAI has grown to become a household name on AI innovations. For instance, its AI innovations have set new standards for robot dexterity while its gaming bots have beaten human champions.

Launched as a non-profit research lab in 2015, the firm has made impressive strides in rivaling Google (GOOGL) and Amazon (AMZN) on AI innovations. However, Elon Musk has already left the company to focus on his own artificial intelligence projects at Tesla.

Microsoft investing to Enhance Azure

OpenAI did experience financial challenges earlier in the year. Consequently, the start-up opted to form a profit firm for pursuing strategic investments as it works to strengthen its balance sheet. Microsoft investing in the company validates the outrageous promises that the firm has made in recent months.

For Microsoft, the $1 billion investment is of great importance. For starters, it paves the way for it to enhance its Azure cloud-computing platform. By coming up with supercomputing technologies, the company should be able to fend off stiff competition from Amazon and Google on the cloud.

The Microsoft cloud platform has for the longest time remained in the shadows of Amazon Web Services. However, by adding new features to Azure, the software maker hopes to bridge the gap and take the fight to Amazon in the race for cloud customers.

By building artificial general intelligence to tackle complex tasks, Microsoft should be able to attract more clients. In return, the company should be able to accelerate Azure sales, which were up 64% in the recent quarter. Certainly, the $1 billion investment also underscores how Microsoft is trying to commercialize and monetize its AI investments.

Microsoft criminal fine in Hungary

Microsoft’s investments of $1 billion on AI comes at a time of soaring regulatory woes in Europe. The company recently agreed to a $25.3 million fine, which included a criminal fine as well. The fine is for the settling of anti-bribery charges in Hungary.

The software giant is to pay $8.8 million as a criminal fine as part of a three-year non-prosecution agreement. Nevertheless, the criminal fine is in relation to illegal activities perpetrated by the company’s staff with regard to software sale. In addition, Microsoft has agreed to a $16.6 million settlement with the Security Exchange Commission over civil charges.

Authorities in Hungary allege that executives and employees pushed for steep discounts to complete software transactions. Instead of the discounts going to customers, they ended up as bribery payments to government officials. Of concern is that Microsoft ended up recording the discounts as business expenses.

US companies’ Europe woes

Microsoft joins a growing list of US companies that have found themselves at a crossroads with regulators in Europe. For example, the European Union antitrust chief is fresh from fining Qualcomm (QCOM) $271 million, approximately 1.3% of Qualcomm’s revenue in 2018. The fine is in relation to claims that the chipmaker resorted to predatory pricing to drive a competitor out of the market.

In March 2019, the European antitrust commission handed Google a fine of 1.49 billion euros. The fine was in relation to claims that the company engaged in abusive practices on online advertising. Likewise, Apple is also on the European Union radar over complaints raised by Spotify (SPOT). The music streaming service alleges that Apple is using its Apple Store to clamp down on competition on music streaming.

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