Microsoft’s $1B For OpenAI Aimed at Improving Azure Cloud Platform

Microsoft announced Monday it will invest $1 billion in OpenAI, a young venture that aims to democratize the benefits of artificial intelligence and software-driven automation. The Redmond, WA-based tech giant says it will work with OpenAI in coming years to enhance Microsoft’s existing cloud computing and AI platform, Azure.

San Francisco-based OpenAI says it plans to help Microsoft (NASDAQ: MSFT) extend the capabilities of Azure, its data hosting service, in large-scale AI systems. Those efforts could in turn aid developers who use Azure to work on AI software applications in the future, according to a news release.

Microsoft’s decision to invest in OpenAI and partner with the startup founded in 2015 comes as other tech giants navigating the AI and cloud landscape make investments and deals of their own.

OpenAI is still an emerging player in the highly competitive AI sector, but is led by a well known Silicon Valley figure, Sam Altman. Altman previously served as president of Y Combinator, which runs large-scale accelerator programs for seed-stage startups. In a blog post announcing his departure from Y Combinator earlier this year, Altman wrote that he planned to devote his full energies to OpenAI, which he described as “more exciting (and more complex) than I ever imagined.”

Under the terms of the deal, OpenAI will port its services to run on Microsoft Azure, and Microsoft will become OpenAI’s “preferred partner” for bringing new AI services to market.

“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’s CEO, says in the release.

Microsoft and OpenAI say they plan to create a computing platform and use it to train and run advanced AI models, including hardware products created using Microsoft’s supercomputing technology.

Some of Microsoft’s rival software and gadget makers, including Amazon (NASDAQ: AMZN) and Alphabet (NASDAQ: GOOGL), have also been making big bets on AI and cloud computing technologies. Those investments have sometimes come in the form of acquisitions, like Amazon’s purchase of CloudEndure earlier this year for a sum reported to be around $200 million. Today’s tech giants are also making large internal investments in AI, such as Alphabet’s support for Waymo, its autonomous vehicles division.

Jeff Buchanan is the editor of Xconomy Seattle. Email: jbuchanan@xconomy.com Follow @_jeffbuchanan

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