OpenAI, creator of ChatGPT, casts magic at Microsoft

The most popular startup in Silicon Valley right now is OpenAI, the Microsoft-backed developer of ChatGPT, a very extravagant chatbot that can write a poem, college article, and even a line of software code.

Tesla tycoon Elon Musk was one of the first investors in OpenAI, and Microsoft is reportedly in talks to make an initial investment of $1 billion to $10 billion to challenge Google’s world-leading search engine.

Granted, the Windows maker’s cash injection would add a massive $29 billion in value to OpenAI, making it a rare achievement in the tech world as big players like Amazon, Meta and Twitter cut costs and lay off staff.

“Microsoft is clearly being aggressive on this front and will not lag behind a potential game-changing AI investment,” said Dan Ives, analyst at Wedbush Securities.

Before ChatGPT was launched, OpenAI wowed tech enthusiasts with Dall-E 2, a software that creates digital images with a simple instruction.

Not hiding its AI ambitions, Microsoft has integrated Dall-E 2 into many of its applications, and now, according to a report in Bloomberg, the tech giant wants to infuse ChatGPT into the Bing search engine to beat Google.

Since the launch of ChatGPT in November, this chatbot’s ingenuity has aroused the curiosity and admiration of internet users.

He is capable of formulating detailed and human-like answers on a wide variety of topics in a matter of seconds, raising fears that he is vulnerable to misuse for school tricks or disinformation.

– ‘Not cheap’ –

Artificial intelligence expert Robb Wilson, founder of software company, said that the dizzying success is partly due to OpenAI’s clever marketing strategy that makes its research accessible to non-experts.

“It was one thing for technologists to have this technology. Presenting it in a chat UI and allowing non-developers to start playing with it ignited a conversation,” he said.

Founded in late 2015, OpenAI is led by 37-year-old entrepreneur and former head of venture incubator Y Combinator, Sam Altman.

From the very beginning, the company has counted on financial support from prestigious contributors, including LinkedIn co-founder Reid Hoffman, investors Peter Thiel, and Musk.

The multi-billionaire served on OpenAI’s board of directors until 2018, but left to focus on electric vehicle company Tesla.

The startup also relies on a team of computer scientists and researchers led by Ilya Sutskever, a former Google executive specializing in machine learning.

OpenAI, which did not respond to AFP’s questions, had around 200 employees by 2021, according to a query made directly via ChatGPT.

For now, despite the excitement generated by ChatGPT, the company has yet to find the path to financial independence.

Founded as a nonprofit, the startup became a “nonprofit” in 2019 to attract more investors, and this week co-founder Greg Brockman said a paid version of ChatGPT is in the works.

For a company with exorbitant expenses, seeking funding seems necessary.

In a Twitter exchange with Musk in early December, Altman acknowledged that every conversation in ChatGPT costs OpenAI a few US cents.

According to estimates by Tom Goldstein, associate professor of computer science at the University of Maryland, the company spends $100,000 a day on its bot, or about $3 million a month.

Goldstein said partnering with Microsoft, which provides remote computing services to the startup, could cut costs, but “in either case it’s not cheap.”

“Some say it’s a waste to dump such resources into a demo,” he added.


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