OpenAI secures $1 billion investment from Microsoft

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On Monday, Microsoft announced that it had entered into a new partnership with OpenAI. As part of the deal, the technology giant will invest $1 billion in the artificial intelligence (AI) firm. Additionally, the Redmond, Washington-based multinational company will give its new partner access to its Azure servers to optimize its AI projects.

The two corporations are collaborating to develop new artificial general intelligence (AGI) tools. As opposed to contemporary machine learning programs, currently, theoretical AGI systems will be able to perform human-level cognition functions. As part of the new deal, Microsoft has “preferred” access to any new tools OpenAI intends to sell.

Why Microsoft Wants AGI Tech

In truth, Microsoft isn’t partnering with OpenAI to develop the world’s first AGI system. As CEO Sam Altman told The New York Times, his company can’t build a complete AI system.

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Indeed, many industry experts believe humanity won’t develop true AGI systems for decades or even centuries to come. As Microsoft Chief Executive Officer Satya Nadella noted, the two tech companies view AGI as product development “North Stars.”

The Windows maker made its billion-dollar investment in OpenAI, hoping that it will create products that can optimize its current offerings.

Though Microsoft is best known for licensing software and manufacturing gaming hardware, the legacy corporation makes billions from its services business. With a cutting-edge AI solution, the company could make its customer relationships management, cloud computing, and next-generation conferencing products more efficient and more secure.

Why OpenAI is Partnering with Microsoft

Founded in 2015, OpenAI launched as a nonprofit research company supported by tech luminaries, including Elon Musk. Its backers created the organization to develop AI that would not pose a threat to humanity. In that capacity, the firm has developed programs capable of beating human players at Dota 2 and generating unnervingly realistic fake news stories.

However, the organization recently ran into an existential problem.

As a nonprofit, the firm struggled to attract investors because it can’t provide a return on their money. Conversely, Amazon and Google have dumped billions into their AI programs because they can deploy or license any technologies they develop. OpenAI sought to address this issue by reorganizing as a limited partnership, limited profit corporation with a nonprofit parent company earlier this year.

Now, companies that invest in OpenAI can reap the rewards of their cash injections until they generate a 100-times return. Once that threshold is reached, the nonprofit will gain access to the company’s earnings. As TechCrunch pointed out, the firm’s new method of operation seems to contradict its original mission as an organization “unconstrained by a need to generate a financial return.”

However, since its founding, OpenAI has undergone significant changes. For one thing, Elon Musk left the firm’s board in February 2018. The executive cited concerns that its work might conflict with Tesla’s machine learning development efforts. Without his influence, the company seems to have altered its roadmap.

OpenAI once sought to develop friendly machine intelligence, but its focus now includes making AI capable of turning a profit.