Microsoft Considers $10 Billion Investment in ChatGPT Creator

One million users in less than a week

Microsoft Corp. is in discussions to invest as much as $10 billion in OpenAI, the creator of viral artificial intelligence bot ChatGPT, according to people familiar with its plans. The proposal under consideration calls for the Redmond, Washington-based software giant to put the money in over multiple years, though the final terms may change, the people said, asking not to be named discussing a private matter. The two companies have been discussing the deal for months, they added.

The potential investment would involve other venture firms and could value OpenAI at about $29 billion, citing people familiar with the talks. Documents sent to investors had targeted end-2022 for a deal closing, it added.
ChatGPT has lit up the internet since launching at the end of November, gathering its first million users in less than a week. Its imitation of human conversation sparked speculation about its potential to supplant professional writers and even threaten Google’s core search business. The organization behind it, co-founded by Elon Musk and Silicon Valley investor Sam Altman, makes money by charging developers to license its technology.

Microsoft’s investment in the developer of ChatGPT may be the smartest $1 billion investment ever made

If ChatGPT realizes its potential, Microsoft may have future-proofed its cloud and browser business forever  

For the past few months, it has looked like Big Tech’s bull run is coming to an end. As interest rates soar, even well-funded tech companies are retreating from risky, expensive moonshots or money-losing projects. But a speculative bet is increasingly looking like excellent value for money: OpenAI just  released AI bot ChatGPT and is in talks to raise $30 billion in capital.

In 2019, Microsoft invested $1 billion in buoyant artificial intelligence research firm OpenAI, co-founded by Y Combinator’s Sam Altman, Elon Musk, and a group of others just over seven years ago. Financial details of the deal weren’t disclosed at the time, but MIT Tech Review reported in 2020 that the $1 billion was split between cash and credit for Azure, Microsoft’s cloud business. In November, OpenAI released an easy-to-use bot, ChatGPT, based on its GPT 3.5 language model trained on Azure. Engineers, academics, entrepreneurs, non-techies, and investors were nearly universal in their hype and praise as ChatGPT proved (up to a point) to be frighteningly intelligent. Even when buggy, ChatGPT is so smart that Google considers the chatbot “Code Red” for its search business.

Now, OpenAI is reportedly in talks to raise more capital at a valuation of nearly $30 billion – up from a current valuation of $20 billion – and is reportedly in talks with the VC led by Peter Thiel -Company Founders Fund. The valuation would be cemented by a takeover bid with the sale of existing shares to investors. The Information reported that the company could integrate ChatGPT with Bing, its struggling Google competitor. The first real threat to Google’s search hegemony in two decades.

Why tech insiders are so excited about ChatGPT?

The chatbot  answers questions and writes essays 

For his day job, Tobias Zwingmann is the managing partner of RAPYD.AI, a German consulting firm that helps clients make use of artificial intelligence. On the side, Zwingmann teaches online courses on AI. Lately, Zwingmann has been generating lecture notes using ChatGPT, a new chatbot that’s quickly become the latest fad in tech. Zwingmann said he recently asked ChatGPT to explain the mechanisms and workings of a machine learning technology known as a DBSCAN, which is short for density-based spatial clustering of applications with noise, because he is too “lazy to write it all down.” “I went up and said, ‘OK, tell me a detailed step by step of how the DBSCAN algorithm works,’ and it gave me that step by step,” Zwingmann said.

After a little bit of polishing and editing, Zwingmann said the lecture notes were in good shape. “This took me like 30 minutes, and before that I would have spent the whole day,” Zwingmann said. “I can’t neglect that this has proven to be hugely beneficial.”

ChatGPT debuted in late November and has quickly turned into a viral sensation, with people tweeting questions, such as “Are NFTs dead,” and requests like, “Tell a funny joke about the tax risks of international remote work.” They include a screenshot of ChatGPT’s response, which often — but not always — makes sense.

The technology was developed by San Francisco-based OpenAI, a research company led by Sam Altman and backed by Microsoft, LinkedIn co-founder Reid Hoffman and Khosla Ventures. ChatGPT automatically generates text based on written prompts in a fashion that’s much more advanced and creative than the chatbots of Silicon Valley’s past.

U.S. regulator moves to block Microsoft’s takeover of Activision Blizzard

FTC concerned software giant would control too much of video game market 

The U.S. Federal Trade Commission said Thursday it is suing to block Microsoft’s planned $69 billion US takeover of video game company Activision Blizzard, saying it could suppress competitors to its Xbox game consoles and its growing games subscription business.

The FTC voted 3-1 to issue the complaint after a closed-door meeting, with the three Democratic commissioners voting in favour and the sole Republican voting against. A fifth seat on the panel is vacant after another Republican left earlier this year.

The FTC’s complaint points to Microsoft’s previous game acquisitions, especially of well-known developer Bethesda Softworks and its parent company ZeniMax, as an example of where Microsoft made some popular game titles exclusive despite assuring European regulators it had no intention to do so.

Phil Libin: ‘Meta’s metaverse idea old & uncreative, it’s never worked’

Most of the technology credited with being part of the metaverse has been around for years

The day after Microsoft announced its intent to buy gaming powerhouse Activision Blizzard, the company released a statement saying the deal would “accelerate the growth in Microsoft’s gaming business across mobile, PC, console, and cloud and will provide building blocks for the metaverse.”

Every week, it seems, another company is planting its flag in the metaverse, scrambling to figure out how to make money in this next digital frontier. At the end of December, Walmart filed several new trademarks indicating that it intends to make and sell virtual electronics, toys, sporting goods, and personal care items. Last week, Ralph Lauren’s CEO said the metaverse is the way to attract younger shoppers. Nike, Gap, and Urban Outfitters are just a few of the other companies that have looked to plant a flag in this virtual landscape.

But as with anything on the receiving end of breathless hype, there are skeptics. Phil Libin, founder and former CEO of Evernote, the note-taking app, and now co-founder and CEO of mmhmm, a startup that provides improved video chat tools, tweeted earlier this month that the metaverse is a “squishscammy word. If you include things like video games and, um, the internet, it’s already a big success. AR has future potential. But I’m calling b.s. on a persistent, decentralized, skeuomorphic, interconnected 3D world, experienced primarily through VR.”

Sony to acquire Bungie game studio — developer of Xbox-owned Halo — for $3.6 billion

Bungie makes the popular game franchise Destiny

PlayStation-maker Sony is escalating its competition with Xbox-maker Microsoft by buying the video game studio behind one of Xbox’s hit games. Sony Interactive Entertainment said Monday it would spend $3.6 billion to buy Bungie Inc., an independent game publisher based in Bellevue, Washington. Bungie makes the popular game franchise Destiny and was the original developer of Xbox-owned Halo.

Microsoft bought Bungie  in 2000, but later spun off the game studio in 2007 while retaining intellectual property rights to the Halo franchise. Sony is one of the world’s biggest video game companies, but Microsoft has been ramping up its gaming ambitions, most recently by announcing plans to buy high-profile game publisher Activision Blizzard for $68.7 billion. Acquiring the owner of titles like Call of Duty and Candy Crush would immediately put Microsoft ahead of Nintendo as the third-biggest gaming company in global sales, behind Japan’s Sony and Chinese tech giant Tencent.

Microsoft offers strong forecast

Forecast Focuses on Cloud Growth

Microsoft Corp. shares rose in late trading, reversing an earlier decline, after the software giant gave a forecast that reassured investors the company’s Azure cloud-computing business still has potential to drive growth. Earlier, Microsoft had reported quarterly sales that topped $50 billion for the first time and profit that exceeded analysts’ estimates, fueled by cloud, gaming and Windows software. Still, Azure revenue decelerated from recent quarters, sending the stock tumbling more than 5%.

Then, on a conference call, the company forecast the closely watched Azure revenue growth rate would pick up in the fiscal third quarter from the second, excluding the impact of currency fluctuations. The stock rose as much as 3.9%. Despite the earlier concerns, the Azure forecast will be “front and center tomorrow morning,” Dan Ives, an analyst at Wedbush, said. “This will help calm Street tech growth worries.”

Investors on Tuesday initially focused on the 46% increase at the company’s cloud unit, which fell short of the rosiest estimates and lagged behind gains for the two prior periods.

Real estate in the metaverse is booming

 The Metaverse economy

The idea of spending thousands or even millions of dollars to buy fictitious “land” in a virtual world sounds, to be frank, absurd.

But in recent months, we’ve seen significant investments in virtual land within the metaverse. PwC is among the latest to dive in, having purchased real estate in The Sandbox, a virtual gaming world, for an undisclosed amount. If other reported sales are anything to go by, it would have been a handsome sum. One person recently bought a plot of land in the Snoopverse – a virtual world rapper Snoop Dogg is developing within The Sandbox – for US$450,000 (around £332,500). Meanwhile, the Metaverse Group, a real estate company focused on the metaverse economy, reportedly bought a piece of land in Decentraland, another virtual platform, for US$2.43 million.

Let’s refresh on what the “metaverse” is. You probably heard the term a lot when Facebook re-branded to Meta in October 2021. Other companies, such as Nike and Microsoft, have also announced they will launch into this space. he metaverse describes a vision of a connected 3D virtual world, where real and digital worlds are integrated using technologies such as virtual reality (VR) and augmented reality (AR). This immersive environment will be accessible through the likes of VR headsets, AR glasses and smartphone apps. Users will meet and communicate as digital avatars, explore new areas and create content. The idea is the metaverse will develop to become a collaborative virtual space where we can socialise, play, work and learn.

Google, Twitter and Microsoft in great shape thanks to advertising and the cloud

Market expectations exceeded

The digital transition accelerated by the pandemic continues to benefit tech giants, such as Google, Microsoft and Twitter, which on Tuesday published quarterly results that meet or exceed investor expectations. Alphabet, the parent company of Google, saw third-quarter revenue jump 41% to $ 65 billion, with the internet giant posting net profit of $ 18.9 billion, well above expectations of the market.

The world’s number one online advertising company, which is the subject of numerous investigations and prosecutions on suspicion of anti-competitive practices, continues to reap astronomical revenues. From July to September, YouTube sold for $ 7.2 billion of finely targeted advertising space according to content and users, against 5 billion in the same period last year.

Twitter results also confirmed this trend. The blue bird group recorded a very heavy loss of $ 537 million in the third quarter, linked to an amicable agreement with shareholders who considered themselves aggrieved, but its turnover, $ 1.28 billion, met expectations. Its advertising revenues increased by 41% over one year and the platform exceeded 210 million daily users said to be “monetizable”.

Microsoft also pleased Wall Street, with 20.5 billion in net profit from July to September, i.e. a jump of 48% of its profits in one year, for a turnover of 45.3 billion (+ 22% ). Personal computing (Windows, computers, video games) is doing well, but it is above all its cloud services, scattered throughout all of its activities, that are fueling the company’s growth.

Big Tech pledges billions to bolster US cybersecurity defenses

500,000 cybersecurity jobs across the U.S remain unfilled

Tech giants AppleGoogle and Microsoft have pledged billions to bolster U.S. cybersecurity following a meeting with President Joe Biden at the White House on Wednesday. The meeting, which also included attendees from the financial and education sectors, was held following months of high-profile cyberattacks against critical infrastructure and several U.S. government agencies, along with a glaring cybersecurity skills gap; according to data from CyberSeek, there are currently almost 500,000 cybersecurity jobs across the U.S that remain unfilled.

“Most of our critical infrastructure is owned and operated by the private sector, and the federal government can’t meet this challenge alone,” Biden said at the start of the meeting. “I’ve invited you all here today because you have the power, the capacity and the responsibility, I believe, to raise the bar on cybersecurity.”

In order to help the U.S. in its fight against a growing number of cyberattacks, Big Tech pledged to invest billions of dollars to strengthen cybersecurity defenses and to train skilled cybersecurity workers.

Microsoft in advanced talks to buy AI

Artificial intelligence and speech technology

Microsoft Corp is in advanced talks to buy artificial intelligence and speech technology company Nuance Communications Inc at about $16 billion, according to a source familiar with the matter. The price being discussed could value Nuance at about $56 a share, the source said, adding that an agreement could be announced as soon as Monday.

Bloomberg News, which first reported the deal between Nuance and Microsoft, said talks are ongoing and the discussions could still fall apart. Burlington, Massachusetts-based Nuance whose voice recognition technology helped launch Apple Inc’s assistant Siri, makes software for sectors ranging from healthcare to the automotive industries.The deal with Nuance would be Microsoft’s second-biggest deal, after its $26.2 billion acquisition of LinkedIn in 2016.


Microsoft in talks to buy Discord for more than $10 billion

 Discord has also been talking to others about a sale

Microsoft Corp. is in discussions to purchase videogame-focused chat platform Discord for more than $10 billion, according to a report by Bloomberg News. Citing sources familiar with the matter, Bloomberg reported Monday that a deal is not imminent and Discord has also been talking to others about a sale. Bloomberg said Discord has previously talked with Inc. AMZN, +0.86% and “Fortnite” maker Epic Games Inc. One source, however, told Bloomberg that Discord was more likely to go public than sell.

Discord recently hired a new chief financial officer as a first step toward a potential IPO, the Wall Street Journal reported last week. San Francisco-based Discord has raised about $480 million in funding, according to Crunchbase, and most recently closed a $100 million funding round in December, at a valuation of around $7 billion.

Discord is a free service that lets users communicate through video, voice and text. It also offers a $9.99-a-month subscription service with additional features. According to the Journal report, the company had about 140 million monthly users last year, generating $130 million in annual revenue, about three times what it made the year before.

Biden administration to launch a task force to deal with Microsoft hack

The attack linked to China

The Biden administration is expected to put together a task force to deal with major cyber intrusions that Microsoft said this week were linked to China, according to a US official.
There are an estimated 30,000 affected customers in the US and 250,000 globally, though those numbers are expected to increase, the US official told CNN.

The White House declined to comment on the number of victims affected.

“We are undertaking a whole of government response to assess and address the impact. The Cybersecurity and Infrastructure Security Agency (CISA) issued an emergency directive to agencies and we’re now working with our partners and looking closely at the next steps we need to take. This is an active threat still developing and we urge network operators to take it very seriously,” a White House official said.