\
After weeks of speculation, [Microsoft](https://hackernoon.com/company/microsoft) confirmed the extension of its multibillion-dollar __[partnership](https://blogs.microsoft.com/blog/2023/01/23/microsoftandopenaiextendpartnership/)__ with OpenAI on Jan. 23, but the extent of their partnership and the company’s ambitions in the artificial intelligence landscape would not come into full focus until the company’s earnings call the following day.

\
It’s worth noting that the news of the investment in OpenAI, which according to some sources, amounts to about $10 billion over several years, comes just days after the tech giant __[announced](https://blogs.microsoft.com/blog/2023/01/18/subject-focusing-on-our-short-and-long-term-opportunity/)__ that it would be cutting 10,000 jobs to reduce costs amid the turbulent economic pressures the tech ecosystem is experiencing.

\
Microsoft is leaning in hard on its focus on AI and aims to be at the forefront of the emerging industry. CEO Satya Nadella said on the company’s Jan. 24 second-quarter earnings call:

\
> “The age of AI is upon us and Microsoft is powering it.”

\
Nadella believes AI to be the “next major wave of computing” and believes Microsoft’s focus on the technology now will enable it to maintain the loyalty of existing customers and gain market share.

\
> “As customers select their cloud providers and invest in new workloads, we are well-positioned to capture that opportunity as a leader in AI. We have the most powerful AI supercomputing infrastructure in the cloud. It's being used by customers and partners like OpenAI to train state-of-the-art models and services, including ChatGPT, “ Nadella said.

\
Building on this, the CEO announced that Microsoft will be adding support for ChatGPT that will allow its customers to use the chatbot in their own applications.

\
However, this is only the tip of the iceberg, as the company has much bigger ambitions for its partnership with OpenAI, which includes Microsoft serving as their cloud provider with Azure.

\
Nadella said on the call that Microsoft aims to deploy OpenAI’s models across its consumer and enterprise products, noting that almost 200 customers, including KPMG and Al Jazeera, are already using its Azure OpenAI service - which allows for the deployment of large-scale AI models.

\
Microsoft’s cloud segment, comprising Azure and other cloud services, is already a shining light in the company’s earnings as it made $27.1 billion in revenue and was up 22% year over year, while taken by itself, Azure and other Cloud services’ revenue grew 31% versus last year. The company expects cloud revenue to see 17% growth in the next quarter.

\
When asked to explain more about the partnership from an investor perspective and whether its functionality is going beyond Azure OpenAI services by Morgan Stanley analyst Keith Weiss,  Nadella reiterated that investors should see AI as the “next big platform wave” and that Microsoft aims to ride that wave to the top in the early stages as it creates new solutions and new opportunities, noting that this is leading to Azure “being transformed for the core infrastructure business.”

\
The Microsoft CEO noted the company’s dominance in robotic process automation and workflow automation because of its AI capabilities, stating that “GitHub Copilot is the most at-scale LLM-based product out there in the marketplace today” and adding that the company intends to make its offerings even more expansive.

\
> “We fully expect us to sort of incorporate AI in every layer of the stack, whether it's in productivity, whether it's in our consumer services,” Nadella said.

\
Nadella noted his excitement for OpenAI’s ChatGPT gaining traction as it is built on Azure but also pointed out that its relationship with OpenAI has both “an investment part to it and there's a commercial partnership.”

\
> “Fundamentally, it's going to be something that's going to drive innovation and competitive differentiation in every one of the Microsoft solutions by leading in AI,” Nadella said.

\


Read My Stories

Too Long; Didn't Read

Cassandra Forward a free Cassandra-focused community event

Microsoft‘s Big AI Ambitions Go Beyond Just OpenAI and ChatGPT

Too Long; Didn't Read

People Mentioned

@internethugger

RELATED STORIES