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Understanding Microsoft’s Investment in OpenAI

On July 22, Microsoft announced a $1 billion investment in OpenAI, a lab focused on “artificial general intelligence,” or the goal of creating artificial intelligence with human-like observation and learning capabilities. With this announcement,  Microsoft becomes the “exclusive” cloud computing provider for OpenAI and will have access to productizing OpenAI capabilities as they come to market.

Key Takeaways: Microsoft makes a long-term investment in “general intelligence” to start on the next generation of AIs that will be coming to market in five-to-ten years and will be able to recoup some costs back as OpenAI’s cloud provider and monetizer of OpenAI technologies.

From a practical perspective, how does this affect Microsoft Azure Cloud Services and their current AI portfolio?

First, OpenAI is still several years away from having any sort of launchable product. Its approach on imitating the human mind as an artificial intelligence approach is still far from mature. Current artificial intelligence is based on fairly rudimentary neural engagement and simulation. However human intelligence that is brain-based has several other mechanisms for sharing signals and information that work in parallel with the straightforward cognitive neural activity that currently is the basis for AI. It’s the creation of the multi-signal based pattern recognition, response, and “thinking” that OpenAI is working on.

For Microsoft Azure, this investment represents a long-term investment in AI that will impact the next generation of Azure products and services. This should be considered a moonshot investment, but one that will take several years to determine whether the investment is worthwhile or not. If this investment is successful, OpenAI will eventually replace the majority of Azure AI services with a more brain-based approach. Also, of note, by becoming OpenAI’s dedicated cloud partner, Microsoft will likely get back a significant percentage of its funding back in cloud computing expenses. Consider how the likes of Lyft, Pinterest, and other cloud companies have recently announced $100 million+ annua cloud bills. Although OpenAI probably won’t reach that level in the next five years, they will have a lot of cloud computing costs as they test out their artificial general intelligence models and environments.

And then from a general artificial intelligence perspective, current AI is quite artificial and not very intelligent. It takes us a hundred watts to imitate the behavior that the brain can create with only 10 watts. And the brain puts these multiple inputs and outputs together into thought, reasoning, and reaction in extremely efficient ways. OpenAI is an initial step towards developing humanlike thought and reasoning within AI, but we are still a long way from being able to replicate human thought and processing. As OpenAI starts getting closer to its goals, we are going to face ethical dilemmas associated with what is actually being developed and how we should treat these AIs that start getting closer and closer to human, or at least animal-like consciousnesses. Given this investment, there’s a greater chance that Microsoft will be setting or at least influencing these ethical standards.