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Microsoft’s reported $10 billion OpenAI bet is a gamble on the future of AI

Happy Wednesday, friends. This is Matt Weinberger, deputy editor of Insider’s tech analysis team, writing to you from (extremely rainy, hopefully not flooded by the time you read this) San Francisco. 

We’re less than two weeks into 2023, and it’s already become clear that OpenAI’s ChatGPT will be the defining technology of the year. The ability to ask a robot to write you anything from a cover letter to dating app responses has proven to be an addictive and enticing one, sparking a new gold rush in the startup space.

Microsoft clearly wants in on this in a big way: The Redmond-based titan is said to be in talks to invest $10 billion in OpenAI at a $29 billion valuation. The two companies are already pretty cozy, as Microsoft is said to plan to integrate OpenAI’s technology into the Bing search engine and Office productivity suite. But this would take it to the next level — Microsoft is reportedly asking for 75% of OpenAI’s profits until it recoups the $10 billion. 

That’s some serious business, in more ways than one. But it just goes to show you how much confidence Microsoft and others have in the future of AI.

Here’s what you need to know on this wintry Wednesday. 

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Satya Nadella

Brad Barket/Getty Images

1. Microsoft’s big bet on OpenAI is both totally wild and completely understandable. Microsoft is said to be prepping a $10 billion investment in OpenAI, even as separate reports indicate that it’s bringing the ChatGPT AI chatbot and tech like it to products like Bing, Office, and Windows.

  • The would-be deal really underscores just how quickly OpenAI’s star has risen as ChatGPT hits the mainstream. Still, that $29 billion valuation is rich for a company with limited revenue and the high costs of running advanced AI. It raises the question: Is the AI boom just another bubble? 
  • Consider also that even with all the hype, ChatGPT ain’t perfect. Insider’s Jordan Parker Erb used it to answer her Hinge matches — and didn’t get a single response. Artificial intelligence is great at pattern matching, but perhaps less so at matchmaking. 
  • But if you won’t find AI on the dating scene, you might come across it in the courtroom sooner than you think. The founder of startup DoNotPay wants people to use its robot lawyer in traffic court as soon as February. The floodgates are officially open.

Read more about Microsoft and OpenAI here.

In other news:

Tesla Model 3 vehicles queued up at the carmaker's factory in Shanghai, China.Tesla Model 3 vehicles at the company’s factory in Shanghai, China.

REUTERS/Aly Song/File Photo

2. New footage shows a Tesla that was allegedly in self-driving mode stopping short in a busy tunnel — and the 8-car pile-up that followed. The incident happened in San Francisco on November 24th. Surveillance footage of the accident first reported by the Intercept shows the moment the Tesla stopped.

3. A reorg at Apple as a top exec exits. Insider reported this week that Peter Stern, a key exec in Apple’s subscription business, is out. Stern had helped build services like Apple Music, Fitness+, and TV+ into the major players they are today. In the wake of his departure, a new structure is coming to the unit. Read more here.

4. So much for move fast and break things: A top Meta exec reportedly told employees that the company’s headcount had ballooned too fast in recent years, leading to the company moving far too slowly. Some meetings took a month to schedule out because too many people were involved, he reportedly said.

5. AI comes to the creator economy. Read Insider’s list of the top 12 AI tools that are helping content creators do their work, from dubbing to writing copy, according to industry insiders. The full list is here.

6. Google’s next moonshot is a little more grounded. Meet Mineral, a new company spun out of Google’s famed X labs under the larger Alphabet umbrella. It aims to use AI to give farmers more data about their crops, representing a new way for the tech giant to make money from its most cutting-edge tech.

7. Web3 joins the climate fight. Insider’s April Joyner has an exclusive look at the pitch deck that startup Open Forest Protocol used to raise $4.1 million for its Web3-flavored approach to the carbon credit market. Read the deck here.

8. Who’s to blame when remote workers underperform? Salesforce CEO Marc Benioff poked the proverbial this week when he doubled down on his comments that younger, remote employees are underperforming. Experts tell Insider that the real culprit is probably how those workers are trained and managed.

Odds and ends:

Electric car power chargingElectric car power charging

Source Photo/Getty Images

9. The non-environmentalist case for electric cars. Insider’s Tim Levin is an expert on cars in general and electric vehicles in particular. From high-tech bonus features to the benefits of charging instead of pumping gas, here’s his rundown of some less-obvious arguments to make your next car an electric.

10. How to be sneaky on Snapchat. Snapchat’s whole selling point is that the photos you send vanish after a set amount of time. That’s why it’s always told you when someone takes a screenshot. But maybe you want to be sneaky— we don’t judge. Read Insider’s guide on how to take a Snapchat screenshot without alerting the other party.

Curated by Matt Weinberger in San Francisco. (Feedback or tips? Email or tweet @gamoid.) Edited by Hallam Bullock (tweet @hallam_bullock) in London.

Read the original article on Business Insider