Microsoft-OpenAI Monopoly on Advanced Generative AI

The year is 2019. A hand-pocketed Satya Nadella poses with a hand-pocketed Sam Altman after getting their respective babies, Microsoft and OpenAI, into a sort of no-ring-exchanged engagement. Between the technical hoo-ha and the AI-gasm, the Microsoft press release mentions, “Microsoft will become OpenAI’s preferred partner for commercializing new AI technologies.” 

But since the year is 2019 and AI is still in its infancy for the masses, only a few heads turn. Later, as per the New York Times, “over the next few years, it [Microsoft] quietly invested another $2 billion.” 

Jump to November 2022. 

OpenAI releases its much anticipated AI tool based on generative pre-trained transformer technology (GPT), harnessing humongous amounts of data to train and develop a natural language processing chatbot known as ChatGPT.

Right after its release, ChatGPT shattered the records of tech super-apps such as Facebook, Instagram, and TikTok, which took months or even years to reach the one million user base mark. ChatGPT gained one million users on its platform within five days. And has been a buzzword ever since. 

Three months after its release, on January 23, 2023, Microsoft further dips its toes in advanced AI by announcing a “multiyear, multibillion dollar investment to accelerate AI breakthroughs to ensure these benefits are broadly shared with the world.”

And in a sly passing reference, the Microsoft statement reads that Microsoft will be OpenAI’s Exclusive cloud provider. Further adding, “Azure will power all OpenAI workloads across research, products and API services”

So, whenever, wherever, OpenAI services such as ChaptGPT, DALL·E, DALL·E 2, or any future product of OpenAI, will be used, the user will be effectively using Microsoft Azure (and helping Microsoft earn cloud revenue) to power the computational requirements of the AI model. 

Including, but not limited to the fuckton of terabytes required to train such generative AI models. On top of that, since the API services are also in an exclusive partnership with Microsoft Azure, any business that uses GPT 3.5 or hence to develop any application or machine learning model will have to use Microsoft Azure.

In effect, Microsoft has created a monopoly on advanced generative AI by mandating the use of Microsoft Azure for everything-OpenAI. 

Well played, Microsoft!