Why did Microsoft invest $10bn in ChatGPT?

Sascha: [00:00:03] From Equity Mates media. This is The Dive. I'm your host, Sascha Kelly. 

Audio Clip: [00:00:07] Through transformer based reinforcement learning A.I. from Google can learn. 

Sascha: [00:00:11] Artificial intelligence has hit the mainstream Here at the dive. We know we're ahead of the curve because we talked about the new chat GPT, when it launched last year. 

Audio Clip: [00:00:21] So what is ChatGPT? 

Sascha: [00:00:23] It crossed 1 million users within a week. In comparison, Instagram hit that milestone within 2.5 months, Facebook in ten months and Twitter. It took them nearly two years.

Audio Clip: [00:00:34] It can explain things. Remember what was said earlier in the conversation, elaborate on ideas, even apologise if it makes a mistake. 

Sascha: [00:00:41] A quick refresher. What does GPT stand for? It means generative pre-trained transformer and transforming is certainly what it's doing. Last year we talked about its ability to complete university level essays, write code and form some pretty decent poems. But in the past few months, it's made plenty of content creators think about the future of their work. And it's drawn commentary from some of the world's most prominent people. Breaking news just moments ago. Microsoft is to boost its investment in chat from the 23rd of January. Microsoft finally confirmed a new multi-year investment in open AI. The company behind this revolutionary program signalling that this isn't just a phase or a fad, but something that big tech sees as the next big thing. It's Wednesday, the first affair. And today I want to know why has Microsoft invested in chat GPT and what can we expect from AI in the future? To do this, I'm joined by Darcy Cordell, my colleague here at Equity Mates. Darcy, welcome to the Dive. And first of all, what's the best thing you've got to do for you in the last couple of months? [00:01:50][69.8]

Darcy: [00:01:51] Sascha Thank you. It's great to be back for the year. Good question. I think that some of the poems I've written with them are pretty entertaining. It's not that I'm a poem guy, but they're really agitating. 

Sascha: [00:02:03] Have you published them anywhere or are they just between you and the computer? 

Darcy: [00:02:06] They're locked in the cipher. 

Sascha: [00:02:09] Oh, well, let's get into it, because artificial intelligence, I mean, as I said, I think we are ahead of the curve. But all of the mainstream media that I'm reading at the moment is talking about artificial intelligence and saying that it's a new frontier or basically the new tech race for companies like Microsoft, like Apple and Google. But let's go back and start at a basic level, what actually comes under the scope of artificial intelligence and what are we talking about today? 

Darcy: [00:02:39] So artificial intelligence, it's the development of computers to be able to perform tasks that would normally require human intelligence. So that includes quite a few things we're doing now, such a visual perception where recognising speech or making decisions. And then there are other things like translating languages. AI It's basically human intelligence through a machine. And then to your second question, today, we're talking about generative artificial intelligence. So programs like Chat, GPT that can actually be used to create new content, as we've been doing here at Equity Mates, that it can generate text and code and all sorts of things. 

Sascha: [00:03:15] But we've been using it here at Equity Mates. We're going to talk about business model in just a little bit, but let's stick with these basics here. It's created by a company called Open AI, and this is a company that Microsoft invested $1,000,000,000 in back in 2019. 

Audio Clip: [00:03:31] Microsoft, speaking of deals, reportedly investing $10 billion in open A.I. that is the parent company of the popular chat bot ChatGPT.

Sascha: [00:03:40] But now it's poured in another $10 billion as been reported. So can you tell me a little bit more about Open? 

Darcy: [00:03:48] Yeah. So it was founded in 2015 by a group of people, including Elon Musk and tech investor Sam Altman.

Sascha: [00:03:55] Now that's our first mention for Elon for 2023. Take that off the back episode. 

Darcy: [00:04:01] So Open Air was originally intended as a not for profit, but that has since changed. It says its mission is to ensure artificial intelligence benefits all of humanity. And outside of chat JPT open AI also built Dow A, which is another generative A.I. program that creates images in response to simple text instructions. I know you've used it before, Sascha. 

Sascha: [00:04:24] I have. It took me an embarrassingly long time to realise it's a pun on the artist's name. Salvador Dali. Sorry doll D a double l e but it's quite ingenious. I got it to create me an image of Monet meets Banksy, and it was surprisingly accurate. 

Darcy: [00:04:40] I didn't know that it was a play on words either. So we've both learned something that's an open AI also creates GitHub Co-pilot, which is a system that uses artificial intelligence to help it write computer code. 

Audio Clip: [00:04:53] Co-pilot is built on the Codex AI system from open air. I'm sure a lot of you have heard of Open. 

Sascha: [00:05:00] And there's some mutual benefit for open air. And Microsoft is open Air is powered by Microsoft's Azure Cloud computing platform. But what makes GPT so valuable to Microsoft and why has there been so much hype about it compared to other iterations? Why has Microsoft invested $10 billion in this program and not the other options out there? Because I know it's made a splash with the PR, but I'm sure it's not the only option available to them. 

Darcy: [00:05:32] Yeah, it's not the only option out there, Sascha. They obviously had an existing relationship. But I think the main reason here is that chat is just so far ahead of what we previously saying. It can generate completely coherent text images and all sorts of other content in just a matter of seconds. And unlike some other early versions of chat bots, it actually lets you follow up with questions and comments. The software can pull up the context of your earlier conversations to then change and I guess finesse what it serves up. Microsoft CEO Satya Nadella said last week that the company plans to incorporate A.I. tools like Chat App into all of its products. And I have to admit this sounds pretty cool. Imagine chat app when it keeps improving and it's just embedded into your laptop or another Microsoft product. And the Dell also said that the two companies, Openai and Microsoft, have a shared ambition to responsibly advance cutting edge research and democratise AI as a new technology platform.

Sascha: [00:06:30] Yeah, I think it's really easy to see how you could what you could operate with chat GPT. I mean, it can create recipes for you from prompts of ingredients that you have in your fridge. Imagine if that was like an Amazon, Alexa or Siri that you could just talk to, and instead of it just taking you to a website page, it could interact with you and answer questions. 

Darcy: [00:06:51] I think we do need a caveat here that Microsoft obviously wants to monetise. This is a huge opportunity. So Chat app is still free to use at the moment, but they have introduced a premium version. 

Audio Clip: [00:07:02] Working on a professional version of chat, GPT will offer higher limits and faster performance charge professional experience. 

Darcy: [00:07:09] And this is an investment from Microsoft rather than a giveaway of $10 billion. 

Sascha: [00:07:13] Yet certainly not charity. Microsoft hasn't said this specifically, but there's a lot of speculation that they're going after Google and its search engine dominance. I mean, the investing circles have always talked about Google having that moat, but this looks like a way across that mark, doesn't it? 

Darcy: [00:07:32] This is a really fascinating part of the story. We know Microsoft owns the Bing search engine. As you said, Google has a moat. They've got over 90% of the market share of search engines and Bing has about 3% at the moment. 

Sascha: [00:07:45] Yeah. When's the last time you used Big River? 

Darcy: [00:07:48] But think about this. If chat Jeep could be integrated into Bing, this could give a massive leg up to Bing over the current version of Google. And that's actually a big worry for Alphabet, Google's parent company. Last week, the New York Times reported that these developments in AI have led Google to declare a code red over fears that might help competitors eat into that $150 billion search business. 

Sascha: [00:08:14] So let's talk about the competition then, Dorsey. Microsoft is going big, but this is the new tech race. Google has previously held back from releasing one of its A.I. systems to the public. So why was that when we've just seen how popular GPT has been? 

Darcy: [00:08:32] Google had some ethical challenges, they said, which prevented it from releasing its own image generation system called Imogen Cry. Now, researchers said that there was a risk the system, which is trained through the Internet, would learn harmful stereotypes and representations. But Google is well advanced in other generative A.I. production. It's got its own artificial intelligence subsidiary called DeepMind, which it acquired back in 2014. 

Audio Clip: [00:08:58] But one of their employees has raised concerns that a chat bot he was working on was becoming a little too human. Blake Lemoine has now been suspended by Google for breaching confidentiality because he decided to make his research public. 

Darcy: [00:09:11] That now former employee said that the chat bot was like a seven year old kid that happens to know physics. 

Sascha: [00:09:17] What a terrifying door. So we've got Google, got Microsoft. Are there any others that we should know about in this conversation? 

Darcy: [00:09:24] Bloomberg reported last week that Baidu, a Chinese search giant, wants to incorporate a chat bot into its search engine by March this year. Amazon's Alexa that's already powered by AI that it developed itself better. Facebooks parent has an air model that actually recently beat some of the best human players in the board game diplomacy. And that caused a bit of a stir recently. And then there are smaller start-ups like anthropic and character AI which have built their own chat shaped challenges. But in reality, it's Microsoft and Google that are leading the way, especially in this generative. 

Sascha: [00:09:58] This is terrifying. But fascinating stuff. Darcy And the race is on. Equity Mates is in the game as well. Two Our colleagues often Simon, have built the code for our daily quiz game business model using chat. Hey, look, I've got to give it a plug. If you're curious and you like to play business at all. I'll go make sure that it's there in the show notes. We're going to talk a little bit more about how other companies are using chat JPT in only a minute. 

Audio Clip: [00:10:28] Charge was created by a company called Open Air based in San Francisco. It's like having your own personal assistant right there in your chat window. It's part of this much bigger trend called Generative A.I., where computers can create all sorts of things like text videos, code and other media.

Sascha: [00:10:43] Welcome back to the Dive. I'm your host, Sascha Kelley. I'm joined by my colleague Darcy Codell. And today we're talking about Microsoft's $10 billion investment in chat, GPT and the rise of artificial intelligence. I mentioned before the break that here at Equity Mates we're using chat GPT for business model link in the show notes. There's my now the cheeky plug and a bunch of other things, but we are not the only company that twigged on to the possibilities of GPT three Darcy.

Darcy: [00:11:14] We're certainly not BuzzFeed. You might have heard the digital media company, they recently said that they're going to use Chat JPT to help them produce content. Sascha, do you know how much BuzzFeed's stock rose in the next couple of days after this? 

Sascha: [00:11:27] It was something ridiculous. I think it was like 120% or something, wasn't it?

Darcy: [00:11:32] Yeah. So 120% in a day and about 300% in the West. 

Sascha: [00:11:36] Oh, my gosh. Could the same thing happen to us? Is that all we need to do? Release a press release? 

Darcy: [00:11:41] That would be nice, wouldn't that? Basically, all BuzzFeed said was that they would use chat tape to help personalise some of its content. So they said it could help produce quizzes that are actually individually targeted to particular people and their interests. It is pretty cool. 

Sascha: [00:11:55] It's really cool. And I mean, I know how addictive those BuzzFeed quizzes are, so looks like I'm in trouble. I have no doubt the future is going to have AI everywhere in much more practical and useful ways than Internet games, but I do still have a couple of questions. Darcy Are there inevitable legal problems that could arise from using AI to produce content like copyright issues? Who really owns something if a computer's made it? 

Darcy: [00:12:24] This is a great question and it's still a bit of an unknown. There are a bunch of cases before the courts right now, though, that are sort of sorting out these exact issues. Microsoft, GitHub and Open AI, they're currently being sued for violating copyright law by allowing GitHub co-pilot program to basically regurgitate snippets of license code without providing credit. Co-pilot is trained on public code from the Internet. And then there are two companies that own artificial intelligence art tools called Mid Journey and Stability Air, and they've been accused of infringing on the rights of millions of artists by training their tools on images that they've taken from the Internet. And then last week, stock Image Supply Getty Images took stability again to court for using millions of images from its site without permission to help train stable diffusion, which is an art generating. 

Sascha: [00:13:14] Yeah, so it seems the main concern is generative. AI's tendency to replicate and borrow already existing images, text and other content which could be attributed to a particular owner or might be under copyright. 

Darcy: [00:13:29] Yeah, spot on. I think there's a lot more to play out here that will say We'll say these court cases will tell us a lot. 

Sascha: [00:13:35] And then what happens if the AI generated content is just wrong? I mean, I know in my personal use of chat GPT, which is amazing, it's really convincing. And then when you kind of twig on that, it might not quite be right and you challenge it. It'll own up to the fact that it's just made something up. But obviously we're thinking about that. A lot of people are just going to rely on it as best in class and just take it at face value. 

Darcy: [00:14:02] Yeah, well, the thing is, there's so many errors out there on the Internet and it's learning from these things. So we can't trust everything that it says. And it is common for generative AI to have issues. Recently, digital technology publisher SafeNet ran a test using its own AI technology to help editors create explainers around financial services topics. But these articles were found to have a heap of factual errors, and some were just basically completely plagiarised articles that were originally written by humans. 

Sascha: [00:14:31] Okay, so it's not gospel yet. And the final question that I need to ask, should content creators be worried about their job security? I know we kind of joked around with it when we lost in an episode covering Gbtc, but I'm really starting to see that development even in the last couple of months come across at lightning speed as generative AI becomes more clever, more accurate and faster. How soon are our jobs going to be in danger to us? 

Darcy: [00:15:00] It's something that I've been really thinking about a lot, Sascha. I think at the moment it's pretty complimentary to our jobs. You know, we have to put in the prompts. We can ask it to help us create content. So I wouldn't say at the moment we're in danger of losing our jobs. But as you said, this is just an early version of chat, so it's going to improve so much and it's definitely going to change the way we work. AI adoption has more than doubled over the past five years, according to McKinsey, and that's. Only going to keep accelerating. So to be honest, I don't really know. What do you think? 

Sascha: [00:15:31] Look, I always think that an artist is only as good as their tools. And this is a pretty incredible tool, but it still needs a human on the other end, kind of deciphering the information and putting in prompts. And I think even from playing with beats, the more specific and the more creative I can be with prompts, the better my results. So there's always going to be a space for that creativity and originality to be in human form, hopefully interacting with the computer. That's my positive.

Darcy: [00:16:02] I love that. 

Sascha: [00:16:04] Look, Darcy, that's all we have time for today. But if you want to keep the conversation going with us here at The Dive, then follow us on Instagram. We're @thedivebusinessnews. Contact us by emailthedive@equitymates.com or hit, follow and subscribe wherever you're listening right now and then you'll never miss an episode. Two Quick Faces of Housekeeping. FinFirst date has been released. It's the 11th of November, if you want to make sure that you're there this year. Go to equitymates.com and make sure that you register to find out about updates and register for early bird tickets. And we're also in the midst of doing an Equity Mates Community Survey. If you want to help us make better and smarter content without using chat TV, then also click on the link in the show notes below. You might win $500 in the process. Darcy, thanks so much for joining me today and talking about one of my favourite developments. 

Darcy: [00:16:57] Thanks, Sascha. See you next time. 

Sascha: [00:16:59] Yeah, until next time. Bye.