Microsoft will have to buy OpenAI in 2023

In order to remain competitive, OpenAI will need to make ChatGPT free. It's basically going to be a repeat of the browser war since all the major tech companies have their own version of AI that they can offer with their other products. The main issue is that they, OpenAI, don't have any other sources of revenue so they can't continue to give away the product without going broke. Yet, the big companies can do it forever since they have other sources of income. Also, it's unlikely that a big tech company like Microsoft or any FAANG would be able to get antitrust approval to buy OpenAI, so it's not going to happen.

Unless OpenAI becomes a non-profit and can get funding from people who don't want the big tech players to have control over AI, I don't see a bright future for it. It's more likely to find a place similar to firefox where the big search engines pay it for the traffic it sends to them.

MS buying it is not going to happen in 2023 or ever.

Hand wave all you like.

If Microsoft is putting money into a 3rd party company for their AI (and, they are. right now)

…that is fundamentally not sustainable as the “total value” of the relationship increases.

Either a) Microsoft will in-house their own version and drop openAI, or b) they’ll buy them.

Any other conclusion that anyone draws about Microsoft’s commercial relationships is delusional.

The only point in contention is “is openAI special enough?”

Or will Microsoft just clone their models with their own army of engineers, using the papers they release?

Well; all I can say is right now they haven’t committed to doing it themselves, and the “total value of AI” is soaring.

So, bluntly, the current situation is unstable.

I guess it’ll flip one way or another this year, probably quite soon, given the news recently about share sales.

I was listening to a podcast[1] and they say the cost of inference (responding to a question) in ChatGPT is about 1-2 cent. Is that true? And how would that map to the overall cost microsoft can pay for integrating that into Bing, considering number of search queries in Bing.

1- https://www.nytimes.com/2023/01/06/podcasts/hard-fork-tiktok...

>AI similarly has powerful network effects. OpenAI's current business model is genius. By allowing free usage of chatGPT, they are getting millions of "free" employees, all actively and eagerly providing more data and more training to the system.

I never buy this. This story is repeated so often in so many places. You hear it about Tesla all the time "Their dataset is so big because they have all those cars out there no one could compete!". But what do we see every time an actual technical article about building something with AI comes up? Throwing a shit tonne of data at a model doesn't work. The number 1 most important thing about training neural nets is carefully grooming the training data so that the NN learns what you're actually trying to teach it, and doesn't just cheat your tests. So no, I don't believe the 5 millionth user typing "Write a monologue in the style of Benoit Blanc about the Johnny Depp/Amber Heard trial" is helping.

I'm not saying there's no incumbency advantage - there clearly is, which is one of the reasons why Office is still dominant. But it's not about raw data, yes you need data, but at the scale that tech giants operate, multiple companies can have that scale of data, and certainly there's atleast a dozen companies that could scrape the entire web if they wanted to. There's also the simple fact that the team that built OpenAI is probably just... better at building AI products, so it's not really surprising that if they pull this off, they will continue to produce the best AI products, regardless of their data advantage.

The underlying assumption here is that Sam would be willing to sell OpenAI.

I don't think that's the case. There's no amount of money that Microsoft could throw at Sam to convince him to sell. Not only is he already wealthy, but he's also a true believer in AI. And unlike Snapchat, it's going to be very hard for incumbents to clone.