Wall Street analysts claim Microsoft's $13 billion OpenAI investment is "some of the best money ever spent" despite bankruptcy reports — Here's why

fjtorres5591

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May 16, 2023
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The headline is an understatement.
First of all because $13B is pocket change for MS these days. So is $70B for ABK.
(Facebook has sunk $50B into the "Metaverse" VR/AR sector with little to show for it, so far. Which isn't to say they can't get a win from it, someday. Just that life at the bleeding edge is expensive. It's not stuff likely to come from two guys in a garage.)

Second, because they get most if not all the investment back in AZURE business.

Third, because they get to use OpenAI models in their products and get to charge for it. It's not just about CoPilot Pro, but also about the incremental features to the rest of their product line.

But all that is just cashflow.

Not mentioned is that they get access to the OpenAI ip and expertise that creates their models. That gives them a leg up in developing their own inhouse models. For all the angst about MS buying OpenAI, the reality is they don't have to. They already get most of the benefits with none of the downsides. Above all, no regulatory exposure.

(And they still get to pull an "embrace-and-extend" if they need to.)

Whatever happens to OpenAI, MS comes out ahead by getting access to their tech while keeping their exposure to a minimum. If anything, OpenAI imploding might clear the field for them to lock in their generative software customers that rely on the OpenAI/CoPilot strains.
 

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