The Microsoft’s OpenAI ChatGPT Own Goal On Its AI Future

As a village boy, I did come to the same conclusion that Microsoft made a mistake investing $billions and making OpenAI relevant. There are three fundamental ways to launch an AI upstream business: 

Partner with a company with a large user base. OpenAI’s ChatGPT partnered with Microsoft which has millions of users. 

Spend a huge amount of money via promos and advertisements to get data which will improve your AI models as quickly as possible. This is the Temu path; Temu uses AI to power shopping in its ecosystem.

Bake AI into existing in-house data. If you are lucky, and you have the data as Google does, you can launch your Bard equivalent once your code is ready. 

Without Microsoft, OpenAI would not have risen the way it did. It provided money, data and cloud hosting, and yet the same company it did all that is a COMPETITOR.  This was how I put it two weeks ago: “But capitalism does not stop there, as Microsoft tells its shareholders that ChatGPT’s OpenAI, a company which it has supported with $13 billion, is now a competitor. How can you invest $billions in a company and that firm later becomes a competitor? How was that type of agreement a possibility that OpenAI could unveil SearchGPT in a world with Bing? “

Google People, ex-Google CEO agrees: “When Microsoft did the OpenAI deal, I thought that was the stupidest idea I’d ever heard, outsourcing essentially your AI leadership to OpenAI and Sam and his team. And yet, they’re on their way to being the most valuable company,” Eric Schmidt said.

This comment reflects the broader industry debate about the risks and rewards of partnerships in AI. While Microsoft’s investment in OpenAI has yielded significant benefits, such as integrating OpenAI’s advanced models like GPT into its Azure platform and products like Microsoft 365 Copilot, Schmidt’s criticism hints at the underlying tensions in this partnership. It highlights the possibility that Microsoft may have made itself overly dependent on OpenAI for its future in AI, a technology seen as crucial for the next wave of computing innovation.

However, Microsoft’s partnership with OpenAI has so far paid off in many ways. For instance, Microsoft’s early investment in OpenAI gave the company access to state-of-the-art AI technology, which it has been able to integrate into its cloud services, productivity software, and AI-powered tools. This collaboration has helped Microsoft position itself as a major player in AI, competing directly with Google and Amazon in the cloud computing and AI markets.

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Schmidt also pointed out that while Microsoft has invested heavily in OpenAI, it does not have exclusive control over the AI models that OpenAI creates. This could eventually place Microsoft at a disadvantage, especially as other companies and startups gain access to the same technologies that Microsoft helped fund.

Microsoft leadership should pray that no one goes after them as it is indeed possible that ChatGPT was used to write that agreement!

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