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What Microsoft’s $1Billion Investment In OpenAI Means For Both The Companies


What Microsoft’s $1Billion Investment In OpenAI Means For Both The Companies


Microsoft CEO Satya Nadella and OpenAI CEO Sam Altman at the Microsoft campus in Redmond, Wash. on July 15, 2019. (Photography by Scott Eklund/Red Box Pictures)

Microsoft has pledged over $1 billion in Elon Musk’s ambitious project OpenAI to deliver on the promises of artificial general intelligence (AGI). Sharing their values of trustworthiness and empowerment, this multi-year partnership is aimed at a larger good for both the companies. While Microsoft will build a platform that OpenAI will use to create new AI technologies to deliver the promise of AGI, Microsoft will gauge the deal to strengthen on Azure AI supercomputing technologies.

Empowering AGI Like Never Before

OpenAI has been quite critical about its work on AGI and that it benefits all of humanity. Focusing on it, the OpenAI will create newer technologies that will boast of machines with the capacity to learn tasks just the way humans do. 



OpenAI founders have been quite a believer in AGI and that it can solve long-standing challenges in areas that range from climate to healthcare. It wants to achieve AGI by scaling existing deep learning approaches rather than developing new ones. And Microsoft will be OpenAI’s preferred partner when it comes to commercialisation of new AI technologies. Microsoft will act as the exclusive provider of cloud computing services to OpenAI. In return, OpenAI will license some of its technologies to Microsoft for it to commercialise. 

Azure AI Supercomputing Technologies

The investment comes in the light of catching up with its competitors such as Google, Facebook, and Amazon, who have spent large bucks on AI in recent years. The partnership will also focus on extending Microsoft Azure’s capabilities in large-scale AI systems. 

The deal will also focus on building a computational platform in Azure which will train and run increasingly advanced AI models, include hardware technologies that build on Microsoft’s supercomputing technology. It aims at creating foundations of AI to be implemented in a safe, secure and trustworthy manner. 

“By bringing together OpenAI’s breakthrough technology with new Azure AI supercomputing technologies, our ambition is to democratize AI — while always keeping AI safety front and centre — so everyone can benefit,” said Satya Nadella, CEO of Microsoft. 

In a nutshell, the partnership covers the following: 

  • Microsoft and OpenAI will jointly build new Azure AI supercomputing technologies
  • 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 AGI
  • Microsoft will become OpenAI’s preferred partner for commercializing new AI technologies

How Does It Align With OpenAI’s Ambitions?

There have been unprecedented developments in the area of deep neural networks in the last few years in the form of computer vision, speech, NLP, robotic control, machine translation, speech synthesis and more. While modern AI systems work well for the specific problems on which they have been trained, it is tough to train AI systems to help address some of the hardest challenges in the field. 

The developments and innovations kind of fizzed out since 2012 as all the mentioned technologies were all powered by the same approach. While the computational power increased, a lot of AI system built today involves a lot of manual engineering for each well-defined task. 

AGI, which is the central approach by OpenAI is capable of mastering more fields at any given time with much more accuracy and aims to overcome these shortfalls. An AGI working on a problem would be able to see connections across disciplines that no human could. “We want AGI to work with people to solve currently intractable multi-disciplinary problems, including global challenges,” said OpenAI in a press statement. It can create better opportunities for all our lives that are unimaginable today. 

Sam Altman, CEO at OpenAI said, “The creation of AGI will be the most important technological development in human history, with the potential to shape the trajectory of humanity. We are excited about how deeply Microsoft shares this vision.”

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How This Partnership Is More Than Just Social Good

It is well known that OpenAI began as a nonprofit research lab in 2015 and was intended to carry high tech R&D on the lines of Google and Amazon. They aimed at developing AI in a safe and democratic fashion. They also achieved feats such as defeating human players at games such as Dota 2 and writing convincing song lyrics to short articles.

While the whole idea was to work on the open-source manner, earlier this year they had mentioned that it might need more money to continue their work. It was, therefore, open to for-profit firms to invest in the company. They have soon realised that AI models need heaps of data to crunch and that requires huge amounts of expensive computing power. It then opened a new for-profit arm to help pay for its work, where they claimed that investors could achieve a maximum of 100 times return on their investment. 

And now with this partnership, they intend to license some of their pre-AGI technologies, with Microsoft becoming their preferred partner for commercialising them. Microsoft will have widely distributed economic benefits. 

Since this partnership talks of exclusivity and preference, it contradicts with OpenAI’s founding principle which was to freely collaborate among AI researchers and make its work and patents available to others. But the current charter talks about reducing public publishing and involvement of its work citing safety and security concerns. 

Nevertheless, OpenAI still sticks to the creation of beneficial AGI which will be one of the most important technological developments in human history. With Microsoft, it is envisioning to further strengthen and empower everyone with AGI. 



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