Microsoft is in talks to increase its investment in artificial intelligence startup OpenAI by $10 billion in a move to make its Bing search engine a stronger rival to Alphabet's Google, according to reports. MSFT stock edged up amid the reports while GOOGL stock also rose.
Microsoft invested $1 billion in OpenAI in 2019. Microsoft's investment would be part of a new funding round for the AI startup.
OpenAI's technologies include ChatGPT, a chatbot that could make Microsoft Bing a stronger challenger to Google's internet search, and image-generation program Dall-E2.
The software giant also could integrate ChatGPT into its Bing internet search app. ChatGPT provides human-like answers to questions and generates documents.
MSFT Stock: Boost For Bing, Azure Cloud?
The Bing search engine holds nearly 9% of the market, while Google commands roughly 84%, according to Statista. Meanwhile, Google designed its search tools to provide links to websites and advertising.
Microsoft has integrated Dall-E2 tools into its graphics design software. Dall-E2 converts written text into pictures. Other OpenAI tools could be built into email platform Outlook and office productivity tools such as Word.
In a recent report, Oppenheimer analyst Tim Horan said the OpenAI partnership could boost Microsoft's Azure cloud business.
"We expect dozens of new services from OpenAI/ChatGPT leveraging Azure's robust infrastructure in a virtual cycle," Horan said. "These services will include true digital assistants, AI-based legal, accounting, financial services and dozens more. This consumer AI will then be used in enterprise (applications) in equally surprising ways."
OpenAI has used Microsoft's Azure cloud computing unit to develop "generative AI" software tools that create new content from large public data sets. The startup uses machine learning techniques to train AI models. Further, the machine learning software gobbles up text, images, voice recordings, programming code and other forms of data.
A digestive process requiring powerful computer chips builds computer algorithms that pro-actively create new content. Most AI models are limited to making predictions based on pattern recognition. Internet search is just one application of generative AI. The technology also is finding applications in marketing/copywriting, drug and material development, video gaming and digital art.
GOOGL Stock: Big Artificial Intelligence R&D Budget
MSFT stock gained 0.8% to 228.85 on the stock market today. GOOGL stock edged up 0.5% to 88.42.
Meanwhile, Google's cloud computing unit has partnered with startup Cohere, a rival of OpenAI.
Also, Google owns DeepMind Technologies, a U.K.-based AI research laboratory. Google has developed generative AI tools called Language Model for Dialog Applications, known as LaMDA, which uses technology similar to OpenAI's.
According to a Bank of America report, Google has invested some $120 billion in artificial intelligence and cloud computing since 2016.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
