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  • Nick Hilton

Microsoft’s 10 billion dollar bet on OpenAI

Microsoft has announced the third phase of their partnership with OpenAI through a multi-year, multi-billion-dollar investment to develop AI and deliver it on a global scale. This agreement builds on their previous investments in 2019 and 2021 and expands their collaboration in AI supercomputing and research.

The latest announcement details 3 main objectives:

  1. Microsoft will increase investments in the development and deployment of specialised supercomputing systems to accelerate OpenAI’s ground-breaking independent AI research. They will also continue to build out Azure’s leading AI infrastructure to help customers build and deploy their AI applications on a global scale.

  2. Microsoft will deploy OpenAI’s models across consumer and enterprise products and introduce new categories of digital experiences built on OpenAI’s technology. This includes Microsoft’s Azure OpenAI Service, which empowers developers to build AI applications through direct access to OpenAI models backed by Azure capabilities and AI-optimized infrastructure and tools.

  3. Azure will power all OpenAI workloads across research, products, and API services.

This investment in OpenAI, a company which have created a revolutionary new artificially intelligent chatbot tool called ChatGPT, is a strategic move by Microsoft against competitors such as Amazon's AWS and Google Cloud. Is Microsoft aiming to be the big winner when it comes to AI for 2023 and beyond?

Despite challenging economic conditions, it's evident that cloud computing continues to expand and will be a major contributor to Microsoft's future growth. During Q2 of 2023 (ending Dec. 2022), the intelligent cloud segment generated revenue of $21.5 billion, an 18% YoY increase. This segment is primarily driven by Azure which saw a 31% YoY growth and made up a huge 41% of total revenue in the latest quarter.

In mid-January this partnership yielded it’s first product in form of the Azure OpenAI Service which was made available for commercial users. This tool within the Azure Platform promises to “Leverage large-scale, generative AI models with deep understandings of language and code to enable new reasoning and comprehension capabilities for building cutting-edge applications.” Essentially it enables a whole new generation of applications to be built by developers who are now inspired by and able to access these language models.

The reason for this move is that Microsoft's CEO, Satya Nadella, believes that AI will be the next major platform of intense commercial innovation. He stated in response to an analyst's question, that he firmly believes that AI will be the next wave of growth in cloud computing and that integrating automation powered by language models like ChatGPT into various tasks (ranging from answering questions to writing code) can give Microsoft Azure a significant advantage over competitors such as AWS and Google Cloud in securing new customers.

“We formed our partnership with OpenAI around a shared ambition to responsibly advance cutting-edge AI research and democratize AI as a new technology platform,” says Microsoft CEO Satya Nadella. “In this next phase of our partnership, developers and organizations across industries will have access to the best AI infrastructure, models, and toolchain with Azure to build and run their applications.”

Google, who was involved in the development of the technology used in ChatGPT, also has its own AI services. However, they have not yet been made available to the public. Google is concerned that the inaccuracies produced by AI services such as ChatGPTmay harm its reputation, particularly in its core Google Search business. Ironically Google quickly became its own worst enemy for exactly this when upon unveiling their own AI chatbot called ‘Bard’ it was quickly pointed out that incorrect information was being presented as fact. Read about that here. In contrast, Microsoft is proceeding with its investment without such concerns. Amazon AWS also offers AI chatbot services, but they do not have the same level of popularity as ChatGPT, a product which has undoubtedly proved its capabilities since it was launched in late November 2022.

Microsoft's latest investment of $10 billion into OpenAI, the parent company of popular AI language model ChatGPT, is a significant move in the company's pursuit to become a leading player in the rapidly growing AI industry. The investment will strengthen Microsoft's partnership with OpenAI and provide Microsoft with exclusive access to OpenAI's AI technology which will be integrated into Microsoft's consumer and enterprise products. Microsoft's increased investments in supercomputing systems will also accelerate OpenAI's independent AI research, allowing Microsoft to independently commercialise advanced AI technologies. Despite concerns from other AI players such as Google, Microsoft's push towards AI with this investment and its Azure OpenAI service shows its commitment to becoming a leading AI player in the future.

Power Platform & AI

It’s not surprising really that Microsoft would be heavily invested in a large language model (LLM) AI when you look at how much they’ve always pushed natural language interfaces. Even back in 1997 they had Clippy the assistant who would pop up in the Microsoft Office suite to give you a guiding hand. This kind of interface began to really take off with the introduction of the Power Platform though which from the ground up is made to be a low code development environment. Power BI, for example, has introduced features like the Q&A or Smart Narrative visuals which let the user get totally bespoke results unique to how the user is interacting with the report, the data, and the model. Power Apps has even been using Chat-GPT for a few years now to let users create simple apps just by describing what they want it to do.

As Microsoft’s links with Open AI get stronger we’re starting to see more products introduce natural language functionality. In the last few weeks Power Automate has introduced ‘Power Automate Ideas’ which let users create flows just by describing them.

While this may not immediately lead to non-tech savvy users creating their own flows it does streamline development for existing developers. If it works anything like ChatGPT then the ability to prompt and rephrase will make it much easier to iterate on designs until you get the perfect solution.

Azure & AI

AI is already an integral part of Microsoft Azure platform and its usage is expected to grow in the next few years despite the amount of competition that is appearing in the AI space. Azure provides a range of AI services that enable businesses to build intelligent applications and enhance their operational efficiency. These services are used by businesses across various industries, including healthcare, finance, and retail, to automate processes, make data-driven decisions, and improve customer experience.

One of the areas where AI is expected to make a significant impact in Azure is in the field of predictive analytics. Azure Machine Learning provides businesses with a platform to build and deploy predictive models that can be used to forecast future trends and behaviours. These predictive models can then be applied in various domains, like sales forecasting, fraud detection, and customer churn prediction. As Microsoft’s AI development continues Azure's machine learning capabilities are expected to become more sophisticated, enabling businesses to build more accurate and complex predictive models.

ChatGPT, or at least Microsoft’s access to and implementation of it, will play a significant role in natural language processing (NLP) in Azure moving forwards. Azure Cognitive Services provides businesses with a range of NLP services like text analytics, sentiment analysis, and language understanding. These services enable businesses to extract insights from unstructured data sources such as social media posts, customer reviews, and emails. In the future, Azure's NLP capabilities are expected to become more advanced, enabling businesses to build more intelligent chatbots and virtual assistants.

Overall, the future of AI in Azure is bright, with the platform set to become more sophisticated and intelligent. Businesses will continue to leverage Azure's AI services to improve their operational efficiency, automate processes, and gain insights from data.

The team at Infuse are always keeping up to date with the latest developments within this space to make sure we can help our clients get the most out of their data. Get in touch with us via the contact button below if you would like any further information or advice. Please also follow us on LinkedIn and subscribe to our monthly Business Intelliengce Blog to keep updated.

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