Will Microsoft Acquire OpenAI?

I was so interested in this topic, I wrote a 12-min read article (not sure how many words that is, but it's a lot). I fully recognize it will mostly go unread. But sometimes it's also about imagining the future.

I write everyday on AISupremacy, without community support I cannot continue to write. https://aisupremacy.substack.com/p/coming-soon

Azure OpenAI Services is a show of the future of AI-as-a-Service

When Microsoft injected $1 billion in artificial intelligence project co-founded by Elon Musk called OpenAI, it changed everything for the project. It brought the?AI moonshot into the limelight?and made much of its research more concrete.

It’s hard to catch how quickly things moved, but in November, 2021 something incredible happend amid all the headlines at OpenAI. That’s when Microsoft launched the?Azure OpenAI Service?(November, 2021) — giving Azure customers the ability to utilize OpenAI’s machine learning models.

Unveiled at the company’s recent Ignite event, the service is based on GPT-3, a language model developed by OpenAI, the company which Microsoft backed with $1bn in 2019.

This is nothing short of the commercialization of AI-as-a-Service of GPT-4 (that should arrive in 2022 or 2023). See Microsoft’s blog?here.?This could lead to a new generation of AI apps, including the deepfake internet.

Microsoft is playing a long game with this investment. The OpenAI partnership cements the position of Microsoft’s Azure cloud infrastructure as the platform of choice for the next generation of artificial intelligence (AI) supercomputing applications.

Furthermore there’s no reason to assume Microsoft won’t absorb and acquire the company if it proves to be doing good work (it’s not clear what stake of ownership already exists with that initial $1 Billion).

While Google has foot the bill of DeepMind, perhaps the most overpaid group of AI researchers on the planet, OpenAI seem to be working towards more applied research. It may also turn out to be a more profitable venture. So far it has termed a partnership where:

• 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 artificial general intelligence
• Microsoft will become OpenAI’s preferred partner for commercializing new AI technologies

The Start of a Beautiful Partnership for the Future of AGI

This doesn’t sound like a normal partnership but a part ownership structure. The partnership also positions Microsoft as the thought leader in responsible and safe AI.

There’s a definite matching congruence of mission statements, an emphasis on ethics and vision here between the two companies. The fact remains OpenAI was supposed to be a non-profit, but things haven’t turned out that way.

Over the past decade, innovative applications of deep neural networks coupled with increasing computational power have led to continuous AI breakthroughs in areas such as vision, speech, language processing, translation, robotic control and even gaming. It sounds great on paper, but surely nothing much related to its original vision related to AGI.

Modern AI systems work well for the specific problem on which they’ve been trained, but getting AI systems to help address some of the hardest problems facing the world today will require generalization and deep mastery of multiple AI technologies. In the corporate metaverse, Microsoft needs to own the work of OpenAI. It’s too lucrative an opportunity to pass up.

Satya Nadella is too smart not to find a way to acquire OpenAI. Rather than build its own product to make up the costs of building AI technologies, OpenAI said in its announcement that it decided to license some of its “pre-AGI technologies” and make Microsoft its preferred commercialization partner. If we read in-between the lines, it sound like OpenAI will soon just be part of Microsoft.

Microsoft is giving businesses access to OpenAI’s powerful AI language model GPT-3

Microsoft is increasingly partnering with industry leaders around AI including Nvidia.

OpenAI was co-founded by Musk, Greg Brockman, Ilya Sutskever and Sam Altman, the company’s CEO. It has already basically deviated from the original vision. It has already sold out to the lure of BigTech and the corporate Venture capitalists. Sam Altman isn’t exactly a convincing idealist.

So why did Microsoft invest in OpenAI and why did OpenAI accept so easily? Going forward that initial $1 Billion of the deal will allow OpenAI technology to be used to build tools and applications for Microsoft’s biggest customers, such as banks and insurance companies that are turning to AI for everything from customer service to fraud prevention. In the world of business, it’s nearly impossible to say no to monetization.

Microsoft have even partnered OpenAI with its other?acquisitions like GitHub.?Microsoft is also centralizing talent around AI and very strategic cybersecurity acquisitions in the past few years.

Microsoft has held talks to acquire a number of large technology companies in the past two years. IT realizes while the antitrust attention is on Google, Facebook and Amazon, it can get away with quite a lot. It’s a brilliant strategy too.

Microsoft is paying $16 billion ($19.7 billion with net debt) to buy Nuance Communications. Though this has run into trouble with the British watchdog on antitrust, but has been?okayed by the EU.?This positions Microsoft’s innovation in healthcare the full go ahead to take on the future of healthcare with artificial intelligence and automation products.

For the evolution of the corporate metaverse, OpenAI could be a key acquisition. If Google has DeepMind, why not let Microsoft have OpenAI. OpenAI for younger idealists in the field,?has not been the company?to democratize AI, according to its original vision. This is amusing since a lot of Microsoft’s vision around AI, is actually an AI for Good paradigm.

“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 center — so everyone can benefit.” — Satya Nadella, Microsoft CEO

Microsoft Should Acquire OpenAI if GPT-4 is a Success

We don’t exactly know what GPT-4 will spawn on the internet in the automation of content. We do know a deepfake world is coming. OpenAI will be in some part responsible for its manifestation.

Curiously while Amazon, Apple, Google and Facebook have been specifically targeted by Congress as abusing market power, Microsoft has avoided the same scrutiny. We don’t know what to make of this as Microsoft has greater monopolistic power in the WFM movement and tools like Teams than ever before in the future of digital transformation in work.

One of the biggest highlights of Build, Microsoft’s annual software development conference, was the presentation of a tool that uses deep learning to generate source code for office applications.

I think it’s not what GPT-3 does but what GPT-4 will do that’s the key to this scenario. We won’t know that for a few months until GPT-4 is released by OpenMind in 2022 or early 2023.

GPT-3 is the best known example of a new generation of AI language models. These systems primarily work as autocomplete tools: feed them a snippet of text, whether an email or a poem, and the AI will do its best to continue what’s been written.

Their ability to parse language, however, also allows them to take on other tasks like summarizing documents, analyzing the sentiment of text, and generating ideas for projects and stories — jobs with which Microsoft says its new Azure OpenAI Service will help customers.

Is Microsoft Really an Automation Digital Transformation (ADT) Company?

These AI language models will only get better and be able to provide more business value. New startups will be born around GPT-3 and more so GPT-4. Microsoft could own an entire ecosystem of AI-as-a-Service in the spirit of digital transformation supremacy. All it needs to do is acquire fully OpenAI.

Nuance gives Microsoft a company that specializes in voice transcription and related artificial intelligence software. Nuance has a particular niche in health care, providing software to digitize conversations from doctor’s visits and facilitate clinical documentation.

Microsoft’s hold on the future of coding, gaming, healthcare and cybersecurity is becoming immense. In addition to all it regularly does and it’s excellent in the Cloud with Azure. It is at the start of 2022, the most diversified BigTech company in the world, with a bigger moat than Apple, Facebook or Google.

Microsoft by being able to acquire these huge startups like Nuance, LinkedIn, GitHub and probably OpenAI, gives it a huge unfair advantage with its existing partner network and sales teams. In free market capitalism I’m not sure how a Salesforce realistically, or any other direct competitor for that matter, even Amazon can compete against them.

“AI is one of the most transformative technologies of our time and has the potential to help solve many of our world’s most pressing challenges,” said Satya Nadella, CEO, Microsoft.

Azure OpenAI Service

At its Ignite conference in November, 2021, Microsoft announced it will help its customers uncover these kinds of experiences with the new?Azure OpenAI Service, which allows access to OpenAI’s API through the Azure platform and will initially be available by invite only.

This means OpenAI is augmenting Azure with a suite of new tools to help empower businesses and existing Azure customers.

The new Azure Cognitive Service will give customers access to OpenAI’s powerful GPT-3 models, along with security, reliability, compliance, data privacy and other enterprise-grade capabilities that are built into Microsoft Azure.

Microsoft will also offer Azure OpenAI Service customers new tools to help ensure outputs that the model returns are appropriate for their businesses, and it will monitor how people are employing the technology to help ensure it’s being used for its intended purposes.

For all intents and purposes Cloud leaders like Amazon, Microsoft, Alibaba and Google are in a race to provide the best AI-as-a-Service tools to enterprise. It also means other Cloud providers will have difficulty competing which lead to even greater consolidation in the Cloud.

Microsoft also works actively with the U.S. Government and with Microsoft they have an edge over the slower China sector in the Cloud and AI services to businesses offered. While Alibaba, Baidu, Tencent and Huawei do a fair job, they aren’t at the level of Amazon, Microsoft or Google in the Cloud yet in 2022.

The U.S. Government will therefore elect to allow Microsoft to fully acquire OpenAI should they feel the need to do so before 2025. The problem is the deepfakes of AI are coming and OpenAI may get part of the blame.

Elon Musk criticized OpenAI in the past, one of the world’s top AI research organizations, saying it lacks transparency and that his confidence in its technology’s safety is “not high.” He stepped away from the company perhaps because it was not so “open” after all.

Microsoft in 2022 looks like a company that’s literally too big to fail. It’s market cap is suddenly?somehow $2.5 Trillion. BigTech has done incredibly well in the period of instability for many Americans and ordinary workers. The stock of Microsoft has more than doubled since the start of the pandemic.

OpenAI gives Microsoft and Microsoft Research some added credibility in the Cloud. It doesn't even need to be a commercial success. From Google’s acquisition of DeepMind we know the financial prospects of such deals. Azure deeply needs to be able to retain more of its customers or lose to AWS, the Cloud Wars are on-going in 2022.

There’s probably around a 68% chance that Microsoft acquires OpenAI given the depth and synergy of the partnership. This is of course just my personal speculation as a futurist I like to make such predictions. I have no vested interest either way, I’m simply a commentator.

Microsoft Best Positioned for Metaverse

Lost in the shuffle is Microsoft’s acquisition of Zenimax for $7.5 Billion in the area of gaming.?Microsoft is likely the best positioned company on Earth for the metaverse?and corporate metaverse suite of services to businesses.

Few seem to recognize the fact and Microsoft is very careful in its messaging. If you wanted to buy a company for its Metaverse performance, you’d have to have a stake in Microsoft.

The cultural phenomenon of gaming has made it the largest and fastest-growing form of entertainment in the world — an industry that is expected to be more than $200 billion in annual revenue in 2021. The Metaverse is of course predicted to be a TAM many times that multiple, yet intersects with it greatly.

Apple’s VR products will destroy Meta’s I think in the long-run, including its AR glasses that will be out soon. Microsoft has other ways of intersecting with the Metaverse, and the corporate Metaverse of AI is a huge part of how that will work in the later half of the 2020s.?Baidu itself said?it’s at least 5 years away from the Metaverse at the end of 2021.

The last few big acquisitions of Microsoft show incredible synergy, although its hard perhaps for the lay person to connect the dots. How BigTech is tethering itself with the State also means significant antitrust regulations in America likely won’t take place. At least as far as it impacts Azure and AWS and their spin-off AI-as-a-Service products.

The Best is Yet to Come for Microsoft and OpenAI’s Partnership

The sum of $1 Billion was enough to take the idealism out of OpenAI, into an “exclusive” and “preferential” partnership with Microsoft. In AI circles it was a laughable thing to do,?but Sam Altman?is above all an entrepnreural minded businessman.

Whatever DeepMind and OpenAI and similar groups of A.I talent are, how they culminate and consolidate is nearly inevitably towards the money. It’s important to note how only a few years earlier OpenAI’s principles were different. OpenAI’s founding principles was to?“freely collaborate”?among other AI researchers, and make both its work and patents available to others.

It sounds a bit like Altman was able to convince Musk to join the project based on a very different concept than how the projects eventually turned out. According to Sam Altman, Artificial intelligence will create so much wealth that every adult in the United States could be paid $13,500 per year from its windfall as soon as 10 years from now.

Indeed even Silicon Valley elite think Basic income is a good idea. In as little as 10 years, AI could generate enough wealth to pay every adult in the U.S. $13,500 a year, OpenAI CEO Sam Altman said in his 2,933 word piece called “Moore’s Law for Everything.” But critics are concerned that Altman’s views could cause more harm than good, and that he’s misleading the public on where AI is headed.

Typically A.I. advocates turn out to be profiteers or mouth pieces to the financial elite. Google’s current CEO calling A.I. like the invention of fire comes to mind. Still from a business and technology perspective we have to assume OpenAI is only getting started with some of the more innovative things Microsoft will ask them to do to achieve monetization. It’s a better partnership model than the lack of value DeepMind has given to Alphabet.

As part of the financial elite of Venture Capitalists (typically white males), it’s hard to take Altman’s words at face value. We can only hope that OpenAI’s innovative talent has more inclusive voices as well who don’t just white wash monetization while singing the praises of the machine-world.

More Capitalists Equating A.I. to God

What did the deal with Microsoft for so much money truly entail? According to TechCrunch, while the exact breakdown of the nature of the investment wasn’t made public, an account apparently belonging to CTO Greg Brockman on HackerNews said?that it was “a cash investment.”

The “partnership” narrative of course bugged everyone from Elon Musk to Glen Weyl, an economist and a principal researcher at Microsoft Research, wrote on Twitter: “This beautifully epitomizes the AI ideology that I believe is the most dangerous force in the world today.”

If Silicon Valley is in the dark arts of behavior modification at scale, things like AI and Bitcoin,?feel more like ideology and indoctrination than technology and implementation?at times. Some of the?statements of Altman?and the coming deep-fake era may come back to haunt him.

Microsoft may have discovered a pioneering team in artificial intelligence research and been able to mature their own vision of the corporate Metaverse significantly before others, whereby OpenAI becomes the crowning jewel of solving the AI-business puzzle of the future.

I write everyday on AISupremacy, without community support I cannot continue to write. https://aisupremacy.substack.com/p/coming-soon

Will OpenAI be acquired by Microsoft or someone else, what do you think?