Microsoft has agreed to pour $1bn into OpenAI, doubling the amount of cash the non-profit research company turned partly profit-making entity has taken in to date
The Redmond investment comes just four months after OpenAI, founded as a non-profit artificial intelligence research company, reorganised itself. It spun off a profit-making arm, and declared that reaching its goal of developer artificial general intelligence (AGI), would need billions more in investments, on top of the original $1bn luminaries including Peter Thiel and Elon Musk staked back in 2015.
OpenAI and Microsoft described today’s deal as a “partnership” between “two companies thinking deeply about the role of AI in the world and how to build secure, trustworthy and ethical AI to serve the public”.
But that technology will now have a distinctly Azure-like tinge.
The companies declared they would “jointly build new Azure AI super computing technologies” and OpenAI will “port its services to run on Microsoft Azure, which it will use to create new AI technologies and deliver on the promise of artificial general intelligence.”
A statement on OpenAI’s website added, “OpenAI is producing a sequence of increasingly powerful AI technologies, which requires a lot of capital for computational power. The most obvious way to cover costs is to build a product, but that would mean changing our focus. Instead, we intend to license some of our pre-AGI technologies, with Microsoft becoming our preferred partner for commercializing them.”
Sam Altman, CEO, OpenAI, added. “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.”
When it reorganised itself back in March, OpenAI created a “capped profit” company to allow it to “rapidly increase our investments in compute and talent while including checks and balances to actualize our mission”. The cap means investors will get back no more than 100X their original stake – which was an interesting insight to the sort of returns Silicon Valley investors typically expect.
There was no explicit word today on whether this applied to Microsoft’s investment. However, in March, OpenAI declared that “OpenAI” refers to “OpenAI LP (which now employs most of our staff), and the original entity is referred to as “OpenAI Nonprofit.” Presumably this means Microsoft is investing in the (capped) profit making arm.