Microsoft to invest $1 billion in OpenAI, secures multi-year partnership


Microsoft is investing $1 billion in OpenAI, a San Francisco based company. The multiyear partnership is for developing AI on the Azure’s cloud computing service.

In a statement, Microsoft CEO Satya Nadella said “AI is one of the most transformative technologies in our time. It has the potential to solve the world’s most pressing challenges.

By bringing together OpenAI’s technology with Azure AI supercomputing technologies, we democratize AI…. so, everyone can benefit.”

This investment will make Microsoft the preferred provider of cloud computing services to OpenAI for commercializing AI technologies. In the multiyear partnership, the companies will work to develop new technologies. OpenAI will port its existing services to work with Azures cloud platform.

The partnership will accelerate breakthroughs in AGI and aid in the development of next-gen AI applications.

The Founding of OpenAI

Founded by Elon Musk and Sam Altman in 2015, OpenAI is a research lab dedicated to creating artificial general intelligence. The research lab aimed to develop and steer the growth of AI to benefit all of humanity.

It was started with much fanfare with industry luminaries such as Peter Thiel and Elon Mush committing $1 billion. This investment was to build AI that not only matched what Big Tech such as Facebook and Google were building but to improve on it.

Since its founding, OpenAI has made a lot of advances in the field of AI. Researchers at OpenAI have taught a robotic arm to perform human-like tasks. This has cut down on the time and cost to train robots.

However, due to board disagreements, Elon Musk left the OpenAI board in 2018. Although OpenAI focus was on safety and social application of AI, a new for-profit subsidiary, OpenAI LP, was formed.

The restructuring to a “capped profit” organization is to enable the company to raise more capital to help further research in AI. In a statement, OpenAI explained its rationale for the decision:

“We need to invest billions of dollars in the coming years into attracting talented people and building large scale cloud computing platforms.

We want to increase our capacity to raise capital while serving our mission. Our goal is to create OpenAI LP as a nonprofit and for profit – a “capped-profit” company.”

Artificial General Intelligence

Modern AI applications help to solve specific problems on which they have been trained. To address the hardest problems facing the world today, deep mastery and generalization of AI technologies are needed.

Microsoft and OpenAI vision is to build artificial general intelligence that helps to solve multidisciplinary problems. That includes climate change, personalized education, and healthcare.

“The development of Artificial General Intelligence is the most advanced technological development in history. It has the potential of shaping the trajectory of humanity.” said the CEO of OpenAI, Sam Altman. “It’s crucial that AGI is deployed securely and safely and its economic benefits widely distributed. We are excited we share the same vision with Microsoft.”

The two companies will use Azure supercomputing technologies to build applications that will train and run AI models. In regards to the investment, both organizations declined to answer questions whether the $1 billion investment will be capped. The two companies also declined to say how profits and revenue from jointly developed technologies will be shared.

In a statement, OpenAI CTO and co-founder Greg Brockman said,” The $1 billion is a cash investment into OpenAI LP and uses a standard commitment structure. We plan on spending it in less than five years or much sooner.”