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Is Microsoft’s big bet on OpenAI a slam dunk or long shot?
By Gary Marcus  |  Feb 06, 2023
Is Microsoft’s big bet on OpenAI a slam dunk or long shot?
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Amid the razzmatazz surrounding ChatGPT, several big players like Microsoft are wagering on this and other promising AI tech. This is risky but not necessarily foolhardy. The coming months will show whether these investments prove wise, says best-selling AI author, entrepreneur, and NYU Prof Gary Marcus.


This article has been adapted from the original version, which can be found on Gary Marcus' Substack.

I do not usually write about business deals - much less rumors about business deals - but this one has me scratching my head and is actually extremely relevant in terms of getting a glimpse into how people on the inside - both at Microsoft and OpenAI - view the future of artificial intelligence (AI).

According to a rumor published on the website Semafor, and then repeated by Reuters, Microsoft is preparing to put USD10 billion dollars - possibly partly in the form of cloud credits - into OpenAI, valuing OpenAI at USD29 billion dollars.

Of course, whether one thinks USD29 billion is a sensible valuation for OpenAI depends a lot on what one thinks of its future outlook. Revenue so far is rumored to be more like USD29 million per year, so one would have to think that things will soon get a lot better to make this sort of deal. As with many tech deals, there is plenty of uncertainty, e.g., whether ChatGPT can actually displace Google. I have argued that it will not, but nobody can yet know for sure.

Clearly, there are more zeroes here than in most AI deals. Google, before it started acting like Apple, bought 100 percent of DeepMind for something like USD600 million in 2014. Lo

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