Microsoft will have to buy OpenAI in 2023
thoughtfulbits.me
thoughtfulbits.me
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.
They have advantage over other AI startups, but I don't think they have much of an advantage over companies like Google and Facebook which both have massive amounts of data, money, and computing power. Which at the current state is the three most important things needed to build models that can operate at internet scale.
OpenAI can never run ChatGPT at the scale needed for massive usage. They would drown in debt. Hence why ChatGPT is extremely slow, often crashes, and is protected by a rate limiter.
Misstyped queries of mostly the same stuff. Google's real data advantage here is gmail. Billions of real conversations between real people.
They have access to Microsoft's billions and the compute powers of Azure. The other day there was a HN post [1] about Microsoft has build a top 5 super computer. That computer is probably the computer OpenAI used to train their model on.
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.
ChatGPT is popular, because most of the world has looked at it (myself included) and thought “wow”, but I don’t know what Google, Microsoft or anyone else has running in their labs.
Google’s LAMDA demo some time back was incredibly impressive, but it’s not led to anything publicly released yet, so comparisons can’t be made.
Microsoft may not be interested in OpenAI because they’ve looked at it and thought they’re further ahead with some new Cortana buried in a basement in Redmond.
A reason for MS to buy OpenAI would presumably be to deny access to third parties to the AI and make it some kind of exclusive MS only feature. The problem with that is of course that all the research has been published already and outside researchers and developers are already replicating their results. That cat is already out of the bag. E.g. Google has some AI models that it has chosen not to release yet that are similar to GPT. Also, companies like this are heavily dependent on their people and they tend to start jumping ship in case of an acquihire where they receive a lot of equity. So, there's a question of what it is they would be buying.
What's more likely, is that OpenAI will power a long tail of smaller AI companies and create a lot of value that way, while the bigger companies will use their data leverage, and access to vast amounts of infrastructure to use the same algorithms to produce better AI models.
MS and OpenAI are of course collaborating pretty deeply with OpenAI already. They are using Azure and have access to a lot of MS controlled training data. Historically, AI algorithms have been public research with the understanding that they are relatively low value without a lot of infrastructure and training data. The likes of wikipedia only get you so far. So, OpenAI is basically that plus MS provided infrastructure and data. You can machine learn all you want on your laptop but you won't get anywhere until you put a few billion on the table for access to infrastructure and data. MS has done that through OpenAI.
I imagine, MS has some pretty favorable licensing agreement with them as well in exchange. That kind of symbiotic relation ship is mutually beneficial. And with OpenAI set to generate some serious revenue in the next years, it's a pretty good investment too.
MS might be better off buying some of the more successful openai using startups in this space and then integrating their features rather than building those features in house. After they acquire those smaller startups at a relatively low price, they can level them up with better data and access to infrastructure. Leave the experimenting and risk taking to the startups. MS has had a relatively successful acquisition strategy in recent years with some real value added to their products via acquisitions.
It's a very different strategy than what Google is doing. Google is being secretive and probably not that effective in terms of generating revenue from what they have done so far (regardless of how good that is). Making search slightly better isn't going to move the needle for them. Google translate is no longer best in class. There are some gimmicky features on docs and gmail but it's not quite at the same level as OpenAI. Typical Google: lots of R&D but very little to show for their money so far.
I think I like the MS strategy better. There's a learning curve with this kind of stuff and doing it in the open speeds that up massively. Shorter feedback loops, more rapid iteration, etc. Google could do the same of course but so far they are choosing to do everything on their own. They are a bit like MS used to be. I don't think that's a good strategy.
I really hope OpenAI won't get acquired.
Essentially: OpenAI did not realize the massive scale they needed for them to be successful. When they realized this, they could not raise any funding as 'non-profit'. They asked govt, who did not want to fund it, and other sources, at the end they did not have any other recourse.
Sam Altaman says: 90% of funding was needed for compute power, but also was needed for things like buying dataset and then to pay employee so that they can compete with likes of Google to retain them. If they would not have done this, then very soon they would have become irreverent.
So to retain the earlier intent (for greater good) they put in bunch of 'safety features' around funding - Ex. 'Profit Cap' - investors would get only certain amount of profit and after that the profit would be distributed to the world (in some way). Similarly, there were few other 'safety feature he talked about.
The relevant portion starts at 32:39 mark in the following podcast: https://open.spotify.com/episode/3oOX1QHLPw9uvLL5LmBk28?si=s...
1. Publishing the Dall-E papers and pre-trained CLIP weights. This inspired Stable Diffusion/MidJourney, reducing the amount of time OpenAI had for their Dall-E service to get established by maybe a year. During that time, they could've gained long-term customers, generated some revenue, and established partnerships with Adobe and other graphics software makers. Now they're second string.
2. Publishing the GPT-3 paper and releasing ChatGPT for free online. Instead, they should've improved it by adding things like references and released it already integrated in Bing/Word/Cortana. This would've been more valuable to Microsoft. Now, Google has time to catch up and have their own model in their search engine not long after Bing if they do it right. And Anthropic is working on a chat model and will have a good one as well soon.
One possible counterargument could be that these haphazard releases allowed OpenAI to gain mindshare among researchers. But this is much more vague and speculative.
Isn't stable diffusion implementation based on imagen paper?
to quote the "Introducing OpenAI" article from 2015, dec 11:
"OpenAI is a non-profit artificial intelligence research company. Our goal is to advance digital intelligence in the way that is most likely to benefit humanity as a whole, unconstrained by a need to generate financial return. Since our research is free from financial obligations, we can better focus on a positive human impact."
The mentioned things are strategic blunders if their goal is to maximise profit (maybe). If they have some other goal, they might not be blunders. In fact they might be on track with what they want to achieve.
The legal form of the corporate structure is not the deciding factor here. What are their goals is.
OpenAI is already a misnomer, don't make them comically evil.
AI needs more democratization ala huggingface. Not more """""Open"""""AI
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.
Indeed triggering those APIs has been the actual use case for the most widely used chatbots that were around before GPT
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.
We forgetting how Dall-E 2 was made irrelevant just a few weeks after release by Stable Diffusion?
I agree with everything else you're saying though, I don't think he'd have any interest in selling it.
Every experience I ever had of people who achieve power and success tells me that you are wrong. His own wealth is irrelevant. His beliefs are also not relevant. It is very likely he will want to "take the next step". He can always use that next shit ton of money to invest in the next big thing in AI.
No sh*t, dude. Yet somehow its a "genious business model".
If the former, a buyout seems like the obvious next step, antitrust notwithstanding. If the latter, a buyout would kill two of the company strengths - "open"-ness (as weak as it is with the Microsoft tie-ins, it is still notionally a selling point), and loose constraints on target use-cases. Might not seem like such a good deal if it just turns out to be an acqui-hire.
ClosedAI hasn't ever released their NLP model weights. They don't deserve to call themselves "Open"
1- https://www.nytimes.com/2023/01/06/podcasts/hard-fork-tiktok...
Elon Musk: What's the average cost per chat?
Sam Altman: average is probably single-digits cents per chat; trying to figure out more precisely and also how we can optimize it
--
Though I am not sure what per chat really means here. Per message?
In fact, all Microsoft did with DALL-E was to display AI-generated images in Bing's image search. Who would want to use such a feature?
Also, history has proven that companies acquired by Microsoft, such as Skype and Nokia, are corrupt.
Therefore, I hope OpenAI will be an independent organization.