I read the news today that Microsoft has invested $13 billion in OpenAI. I don't know why they didn't Invest in their own AI company, really I need somebody to make this make sense to me.
I'm not a tech billionaire so I may not understand their decisions, maybe this was a smart decision. I think they would prefer to partner with OpenAI than to compete because they see that OpenAI may become unstoppable and the biggest AI company in the near future.
Come to think of it, Microsoft was way behind in terms of the AI competition. And like they say if you know you can't beat them, just join them and that's exactly what I see Microsoft has done.
Do you know that Microsoft’s cloud platform, Azure, now powers all of OpenAI’s models?
This is a very direct way to bring in revenue. So every single time someone uses OpenAI tools like ChatGPT, Microsoft gets a cut of that revenue generated.
But I'm still thinking about their own AI tool, the Microsoft 365 Copilot. It's embedded in their software like Word and Excel. According to some Microsoft, over 70% of Fortune 500 companies are using it.
Here's the Link to where I got that particular data from
They're basically creating a new branch of the company that might become essential to big businesses everywhere. So Microsoft will no longer be behind in the AI race.
Of course, OpenAI isn’t profitable yet. It’s burning through cash and Microsoft is still pouring money into the company. There are people that say that OpenAI might not even see a profit until 2029, so that's like 4 years from now.
But you can be sure that when OpenAI becomes profitable, Microsoft with all the investments they're making will get a big chunk of profits until their $13 billion is paid back and even after, they’ll keep nearly half share of OpenAI’s profits. But the opposite could happen. If OpenAI fails so will all the investments Microsoft has made.