Beginning in early January, there were whispers of Microsoft investing a significant amount in OpenAI — the company behind the chatbot ChatGPT. Rumored amounts in the range of $10 Billion have been proposed, yet no specific figure has emerged yet.
Backing up a bit, OpenAI was founded in 2015 by a collection of Sam Altman, Elon Musk, Peter Thiel, Reid Hoffman, and Jessica Livingston amongst others. Their initial investment — totaling a valuation of $1 Billion, eventually enabled OpenAI’s first product, OpenAI Gym, a toolkit for developing and comparing reinforcement learning algorithms — a subfield of machine learning focused on how agents can learn to achieve goals in uncertain environments.
Following this, OpenAI achieved other advances, such as being the first one to beat the world champions in an esports game back in 2019, securing a $1 Billion investment from Microsoft in July of that year, and training neural networks in a robotic hand to solve a Rubik’s Cube using their OpenAI Five plus Automatic Domain Randomization (ADR).
The biggest advancement, however, launched at the end of November 2022 — their ChatGPT prototype. While there are certainly limitations to the program, it still has been able to write college-level essays, generate intricate Python code, and even pass a Wharton MB course. The limitations come in the form of its nature; it simply knows everything and nothing at the same time. ChatGPT recognizes patterns and cannot create anything technically new or original, as explained well by Dave Vellange in his Silicon Angle podcast. This means that ChatGPT’s AI is only as strong as the database put behind it, which continues to grow as more people put it to use.
So why would Microsoft invest in a product that seems like a glorified version of chatbots on sales websites? Not just because it has the money to, but because OpenAI and ChatGPT have the potential to revolutionize the software industry. Beginning with growth, the market share for AI is projected to grow at a compound annual growth rate (CAGR) of 38.1% from 2022 to 2030. Capitalizing on this could be huge for Microsoft in separating itself from competitors such as Google in the search engine and digital advertising space.
Overall, the best way to summarize the impact of ChatGPT is from SiliconAngle on Amara’s Law: “Very often we overestimate the impact of something in the short term and underestimate the impact of it in the long term.”
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