There's been a flurry of news coming out about
But first, the big picture.
Sam Altman, who has publicly spoken of the need to
What was surprising, however, was how somber the press release was. At three paragraphs long, OpenAI mentioned how much it raised ($6.6 billion), how much it was worth ($157 billion), and what it needed the money for (mostly corporate fluff about advancing its mission).
Inconspicuously missing was a mention of who participated in the funding, and how much, if at all, Microsoft invested in the company. And so of course, the news media was left to fill in the gaps. And fill the gaps it did.
According to reports, Thrive Capital put in
Khosla Ventures, Fidelity, and
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Now, three quarters of a billion sounds like an impressive figure until you realize that this is perhaps the least amount of money Microsoft has invested in OpenAI in a single go. Microsoft invested $1 billion in OpenAI in
In total, Microsoft has invested around $14 billion in the creator of ChatGPT, and it's no wonder that Sam Altman has
Regardless of how much Microsoft ends up owning, it's certain that it will be less than it used to be, and perhaps, this is by design. The company has never acknowledged how much of OpenAI it controlled, but media outlets pegged that number at 49%, just shy of an outright majority.
So when Microsoft announced even more investments in OpenAI, European regulators were considering
That is now less likely to happen as Microsoft's stake is likely to have been diluted following OpenAI's October financing, bringing two key advantages: less regulatory scrutiny and a hedging of bets should things go south.
Microsoft really had no plans to withhold funds from OpenAI, but something changed after the whole leadership fiasco at the company in November 2023. Sam Altman's
Today, The New York Times reports, relationship between OpenAI and Microsoft are "
So does that mean Microsoft is stepping back? Not quite. Both sides have a symbiotic relationship in which OpenAI depends on Microsoft for cloud computing and Microsoft depends on OpenAI for artificial intelligence. But this interdependence is now causing friction as OpenAI thinks Microsoft charges too much for its service and Microsoft thinks it's too dependent on OpenAI for its technology.
"Microsoft could be left behind if it is only using OpenAI technologies,” Gil Luria, an analyst at the investment bank D.A. Davidson, was quoted as saying by the NYT. “It is a real race — and OpenAI may not win it."
Meanwhile, analysts at investment bank UBS say Microsoft's relationship with OpenAI may be its most strategic yet as the artificial intelligence startup expects to grow its revenue to $100 billion by 2029.
But that growth isn't going to come without its cost, and where will that money go? To Microsoft. Since a vast majority of OpenAI training and inference is run on Azure. So the more OpenAI earnings, the more it spends, and the more Microsoft makes, even if its stake is not as high as it used to be.
And even with Sam Altman
So if you ever thought that the artificial intelligence story was anything other than an attempt by big companies to
Microsoft ranked #4 on HackerNoon's
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