Microsoft invests in OpenAI for AI-enabled services and cloud computing.
Microsoft recently announced a multi-year, multi-billion dollar investment in OpenAI, the creators of ChatGPT and Dall-E 2. This follows a series of tech layoffs, including major cuts to Microsoft’s augmented and virtual reality teams, which signals that Microsoft considers offering AI-enabled services to be a much more viable future than the metaverse. Microsoft is sunsetting two VR software efforts, AltspaceVR and Mixed Reality Tool Kit (MRTK).
Microsoft CEO Satya Nadella’s letter to employees attempting to justify the layoffs suggests that artificial intelligence is “the next major wave of computing”. Nadella has overseen Microsoft’s exit from the smartphone business, which shows that he knows how to make decisions to stop spending money on categories competitors are still eagerly pursuing. This could be the case for AR and VR at Microsoft.
The expanded OpenAI partnership is a priority for Microsoft. AI or some yet-to-arrive AI-enabled platform could be the future of Microsoft’s business, so it’s doubling down on integrating and supporting popular AI products. The processing power necessary to answer requests to ChatGPT is expensive, and Microsoft has an extensive cloud operation in the form of Azure that could help. Microsoft is reportedly planning on using the language learning model to create more natural responses for Bing, and they are also considering integrating OpenAI’s products into Microsoft Office.
By investing in OpenAI and focusing on AI-enabled services, Microsoft is betting on a more certain future. Google is reportedly scrambling to respond to OpenAI’s advancements, and Microsoft is taking advantage of the opportunity. AI is a much more viable and secure option for Microsoft than the metaverse, and the company is prioritizing this option over AR and VR.