Microsoft intends to invest $10 billion in burgeoning AI startup OpenAI

Whether you like them, hate them, or are freaked out by the possibilities, AI content creation tools are here to stay and are likely to become a mainstream element in many popular tools – potentially a lot faster than you might think.

Semafor reported this today Microsoft strikes a deal to invest $10 billion in OpenAI, maker of DALL-E and ChatGPT, two of the most vibrant AI tools currently available to the public.

Microsoft already invested $1 billion in OpenAI as part of the company’s first round of funding in 2019, and now the software giant is targeting a significant stake.

That could lead to these tools being integrated into Microsoft’s 365 suite of products or even LinkedIn, while Microsoft has also been exploring ways to integrate ChatGPT with Bing, its search engine, sparking a new battle for AI integration in search tools could trigger.

For its part, Google has stated that it will not currently attempt to integrate AI tools into its search systems, as the results generated are potentially error-prone. But if Microsoft reinvigorated Bing with the addition of those conversational prompts, and took some of the credit off Google in this regard, it could force Google to act and trigger a more rapid shift toward conversational AI as a search option.

In any case, a significant investment by Microsoft would be a massive boost to OpenAI’s ambitions. At some point, the company will also need to monetize its tools to fund its operations, but an integration with Microsoft would change its direction in that regard and could result in those tools being widely deployed in far more apps and tools, very quickly.

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Under the terms of the agreement, Microsoft would reportedly receive a 75% share of OpenAI’s profits until it repaid the money for its investment, after which Microsoft would then take a 49% share of OpenAI. The deal would value OpenAI at $29 billion.

It is a clear confirmation of the potential of AI tools, which are already becoming a valuable mediator of many simple tasks and creation processes for many users.

At the same time, there are concerns about how AI outputs can and should be used, including whether AI-created images infringe artists’ copyrights and whether Google will even recognize ChatGPT-originated works in its search engine.

Chinese regulators have made their first attempt to implement guidelines on the use of AI, which include provisions restricting the use of AI tools to spread “fake news” and Rules that require providers of such technologies to ensure visible labeling of AI-generated content to avoid confusion.

China is also urging the developers of these tools to include “digital watermarks” in all AI outputs to streamline detection, which could see the use of such more limited as at least a substitute for human-made work.

Which is probably a good thing. AI tools like this should really only be used as complementary processes to optimize your productivity – they shouldn’t rely on content creators in isolation, at least in most cases.

But you can already see this happening. Sites looking to cut costs will pump our SEO optimized ChatGPT text which they can then upload hoping to maximize traffic.

These results are generally pretty dull, so the reputational risk in itself is significant enough to limit at least some of that use. But many companies won’t care — which is why Google is trying to get ahead of this wave by reminding companies that AI-generated content, even if it’s very human-like, is against its policies.

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But despite these concerns, you can see the potential as a complementary use case. There are several ways you can use AI tools that can simplify and improve many processes, and you can already see how ChatGPT, for example, can outperform Google search in some respects.

It seems inevitable that Google will eventually integrate something similar, and if Microsoft makes that first big leap, we could see that developing very quickly.

AI tools are not meant to replace you, but they can be an extremely valuable addition to your process. And if that deal goes through, a lot more people will know how very soon.