Microsoft’s £8bn bet on the artificial intelligence arms race 

It’s been described as the greatest technological breakthrough since the printing press, electrical energy and even fireplace.

So it’s maybe no shock Microsoft has pumped as a lot as £8billion into a brand new partnership with artificial intelligence chief Open AI, and its much-hyped Chat GPT mannequin.

It’s all a part of an costly and long-haul push right into a courageous new world the place content material and productiveness are king.

In its easiest phrases, artificial intelligence (AI) is pc programming that permits machines to behave like people. 

Examples embody every thing from the spam filter in your inbox, which is educated to recognise ‘junk’, to Amazon Alexas dotted round your own home that reply to your voice.

First developed in the Nineteen Fifties, AI means computer systems will be educated to imitate dialog, make predictions or suggestions, and finally course of knowledge in a a lot sooner and environment friendly means than people can.

So why, if AI has been round for therefore lengthy, are we seeing such an acceleration in 2023?

The key motive, based on Dr Mhairi Aitken, analysis fellow at science hub The Alan Turing Institute, is due to the advances in ‘generative AI’, which not solely makes processes sooner however can be utilized to create fully unique and new content material, together with audio, pictures, texts and movies.

Chat GPT, which is owned by Elon Musk-backed Open AI, is the most well-known of those pc fashions, which exploded in reputation after it was made free to make use of for the public again in November, with over 1m customers in 5 days.

Whether the former US treasury secretary Larry Summers is appropriate in describing the mannequin as ‘on par with the printing presses, electrical energy and even the wheel and fireplace’, the output is definitely spectacular.

Last weekend Chat GPT was in a position to produce an essay that handed the closing MBA enterprise management examination at a prime US school, and has been used to draft authorized contracts, create artworks, and produce unique track lyrics in the type of any artist in the world.

Tech analyst Matt Navarra mentioned Microsoft’s funding into Open AI was a ‘shrewd transfer’, reflecting the firm’s determined try and modernise and flex its muscle groups at Google, which has been working away on its personal generative AI for some time. ‘The truth Microsoft has pulled this off is a large success story for them,’ he mentioned.

Wedbush analyst Dan Ives dubbed it an ‘AI arms race’, the place every tech firm is seeking to take the lead on this extremely profitable sector.

‘All the large firms are going to make large bets on AI with a payoff that begins in 2023 and past. It’s the fourth industrial revolution. Despite the darkish macroeconomic backdrop, tech stalwarts stay in development mode,’ he defined.

Estimates from Air Street Capital’s State of AI report 2022 recommend that worldwide funding in AI scale-up and start-ups was near £40billion final yr, with nearly all of Silicon Valley wading into the combine. 

The stakes are excessive. PwC reckons AI might contribute as much as £13trillion to the international economic system in 2030, greater than the present output of China and India mixed.

Shortly after Microsoft introduced the Open AI deal, Google issued an inside ‘code crimson’, pushing plans to demo an AI model of its search engine out of concern Microsoft might combine Chat GPT into its personal, lesser used, search engine Bing.

The flip facet with all of those advances is the query mark surrounding jobs. This has felt notably pertinent contemplating the corporations which might be investing are additionally shedding workers.

Data tracker Layoffs.fyi estimates that as many as 57,000 individuals in the tech sector have been laid off in 2023 alone.

Yet the consensus is that that is poor timing quite than a loaded technique from large tech.

Michael Gartenberg, a tech analyst at Flash Advisory & Research, rejected the correlation between AI funding and layoffs. He mentioned though it was ‘poor optics’ for an organization like Microsoft, tech giants have slowly however absolutely been making actions into AI.

 After all, Microsoft invested greater than £800m into Open AI again in 2019, lengthy earlier than AI novices have been utilizing it to put in writing Linkedin advertising and marketing posts.

Aitken additionally underplayed the wider fears surrounding job security. ‘AI goes to automate lots of the duties in the office, nevertheless it gained’t fully eliminate the jobs,’ she mentioned, saying the answer is making new jobs that focus on creating and managing AI tech because it touches each single sector, from vogue to drugs growth.

A report from HSBC, “Will AI take your job?”, written by economist James Pomeroy makes an identical level.

‘It’s extra probably that AI takes some (the boring bit) of your job, quite than all of it,’ he explains. This might set off some substantial productiveness features for a lot of roles if used accurately, and though the outlook for AI and its affect is unsure, that is simply the starting.’

So as an AI battle dawns between Google and Microsoft, the actuality is that AI is right here to remain –reinventing what our jobs seem like, what Silicon Valley appears like and even perhaps what the world of enterprise, artwork and music appears like.