Artificial Intelligence Wars Heating Up As Microsoft Ups The Ante

When the world’s second most valuable company increases its initial investment in OpenAI by 900% to $10 billion, it’s time for big tech to lead, follow, or get out of the way.

Laggards who doubt that artificial intelligence is the future of computing out of fear or lack of vision risk losing their competitive edge as they whistle in the dark making arguments against it.

With a 75% cut of OpenAI’s profits, until it recovers its investment, Microsoft is changing its strategy so fast that it could outpace Google, Amazon, Facebook, and Apple in the race to dominate the most significant innovation in technology since the internet.

Classic Microsoft Strategy

Sticking firmly to its embrace and extend approach to innovation, Microsoft has outmaneuvered Google as it invests billions in launching proprietary AI products that compete with the company behind ChatGPT.

It can be credibly argued that Microsoft is five years ahead of Google in the rapidly emerging artificial intelligence space as it invested $1 billion in OpenAI and agreed to be its exclusive cloud provider back in 2019.

The two companies have been working together to develop and deploy large-scale AI systems ever since, including GPT-3, the world’s most powerful natural language processing model.

Consider the sheer size and scale of AI supercomputing systems that Microsoft and OpenAI have built and deployed on Azure including the first top-5 supercomputer in 2020 built exclusively for OpenAI and hosted on Azure.

Like a giant brain that can solve many problems and learn new things, it has the potential to run millions of calculations in nanoseconds.

The Next Computing Revolution 

Although it is a classical computer that uses conventional processors and graphics chips to perform massive artificial intelligence tasks, Microsoft is also competing against itself, working on developing quantum computing technologies that will dwarf its current mindblowing speed and capabilities.

This will likely extend Microsoft’s definitive leadership position as the world’s second-largest cloud service provider with a 24% market share compared to Google’s 8% as of Q2 2023.

Meanwhile, Google has been developing its own natural language processing (NLP) models, such as its heavily publicized BERT artificial intelligence chatbot.

While Google claims that BERT can help its search engine better understand complex queries and provide more relevant results, the general consensus is that ChatGPT surpasses its large language model in fluency, creativity, and versatility.

This will give Microsoft a major advantage in its bid to cross the gargantuan chasm between itself and Google in the more mature search business.

Gamechanger In Digital Transformation

It is reasonable to conclude that Microsoft’s powerplay in OpenAI represents the most exciting AI development in the last decade, likely transforming every industry and every domain it sweeps through including healthcare, education, and entertainment.

This being said, in the typical stealth fashion that made Google famous in the sneak attack that toppled Yahoo! in 2004, the fact that Google has not publicly disclosed the exact amount of money it has invested in Bard should make even the most bullish Microsoft fan wonder what it’s brilliant strategists are planning.

The artificial intelligence wars have only just begun but Microsoft’s deep strategic alliance with OpenAI is already turbocharging Microsoft’s Azure cloud, the exclusive cloud provider for OpenAI that will power its explosive growth for years to come. Stealing more market share from Google’s core search business is likely to follow. Stay tuned.

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