OpenAI brings Microsoft's market value to soar 2.6 trillion US dollars! The foreign media exploded the internal fighting between the two, and the relationship is delicate

**Source:**Xinzhiyuan

**Guide:**Today, Microsoft's market value has reached nearly 2.6 trillion US dollars, and it is true that it has made a lot of money! With the help of OpenAI to get the second place in the world, the second wave after the Metaverse came.

This round of AI boom has simply made Microsoft profitable!

Just today, with a market capitalization of nearly $2.6 trillion, Microsoft managed to hit a record high.

Microsoft shares hit a record close on Thursday amid optimism about the future of AI

In 2021, riding on the wind of the "metaverse", Microsoft's market value has risen all the way, exceeding 2.5 trillion, surpassing Apple to become the company with the highest market value in the world.

But now, when the capital market is facing a cold winter and the global economy is in a slump, Microsoft once again made history by betting on OpenAI and the "AI Boom" with a market value of nearly 2.6 trillion.

In the rise of ChatGPT and other large models and series of products, Microsoft has become one of the biggest beneficiaries.

Take the big model Dongfeng and take off directly

Microsoft's stock price has reached an all-time high, so far this year, Microsoft's stock price has risen 46% this year.

That's pretty much in line with JPMorgan analysts' forecasts.

Previously, Microsoft executives had predicted that this round of AI explosion would bring Microsoft's annual revenue to $10 billion.

According to Microsoft, the company is on track to generate $10 billion in annual revenue, or more, from developers using the Azure cloud or OpenAI models.

In November 2021, Microsoft's stock price hit a record high, and this Thursday, the stock closed at $348.10, surpassing the November 21 record.

In November last year, OpenAI released ChatGPT, which then ignited a boom in AI large models around the world.

With its partnership with OpenAI, Microsoft has an exclusive license to OpenAI models, including the most popular large language models such as GPT-4.

Now, OpenAI's large models are integrated into the Bing search engine and even the Windows operating system.

At the press conference in February, Microsoft CEO Nadella said: This is an exciting time for the technology world

In addition to the huge investment in OpenAI, Microsoft also provides the underlying computing power.

Most important to investors is of course what this means for Microsoft's earnings.

In the past four quarters, Microsoft's total revenue has been close to 208 billion US dollars.

In April of this year, Amy Hood, Microsoft's chief financial officer, said that the fourth quarter financial growth of Azure cloud is expected to reach 26% to 27%, of which 1 percentage point comes from AI services.

In an open discussion with Microsoft technology chief Kevin Scott on Monday, Hood provided more details, saying that "the next-generation AI business will be the fastest-growing $10 billion business in our history."

Technical director Scott is also very confident in this-"Everyone wants to use our infrastructure, whether they want to train their own models, run open source models, or need to call our API.

Now, analysts at JPMorgan have raised their bid price to $350 from $315.

Analysts with comparable buy ratings on Microsoft stock wrote: "While Microsoft's wave of cloud optimization has dragged down Azure growth, its investments in Security, Teams, Power Apps and forward-looking OpenAI are all laying the groundwork for success. planted long-term seeds."

With Microsoft up 46% this year, the stock has recovered all its losses from 2022. At the time, large numbers of investors exited the tech sector in anticipation of rising interest rates and economic headwinds.

Cloud growth and a shrinking PC market have gripped Wall Street in gloom throughout last year.

The global AI boom triggered by ChatGPT has excited the market again. The Nasdaq is up 32% this year, twice the gain of the S&P 500.

**Resolutely do not listen to OpenAI, is Microsoft betting right? **

model nonsense? don't care

Recently, foreign media have reported that OpenAI has warned Microsoft that AI models such as GPT will have nonsense illusions, but Microsoft firmly refuses to listen and insists on going its own way, just to take the lead in the AI war.

Looking at it now, Microsoft should be betting right.

Recently, foreign media also broke the news that the relationship between Microsoft and its partner OpenAI is not as good as everyone imagined, and there is even a little bit of embarrassment.

According to the "Wall Street Journal" report, OpenAI has warned Microsoft that its own technology has not undergone more training. In this case, it is dangerous to integrate these models into Bing. Bing's chatbot Sydney is likely to talk nonsense.

But Microsoft chose to ignore this warning from OpenAI.

Microsoft CEO Nadella said in a recent interview that we can't do all the alignment work in the lab. In order for the AI model to interface with the world, you need to do this process in the real world, not in the simulation.

**It is agreed that the whole product will be included in my family, why did it send it in advance? **

And, according to sources, Microsoft executives were also dissatisfied with OpenAI's sudden and early launch of ChatGPT last fall.

Originally, Microsoft was busy integrating OpenAI's technology into Bing. As a result, OpenAI suddenly released the public beta of ChatGPT in advance, which turned the two partners into competitors in an instant.

With the success of ChatGPT, there are already some Microsoft employees who worry that ChatGPT will steal the limelight from Bing.

Indeed, ChatGPT exceeded 100 million monthly users within two months, attracting the fastest growing user base in history, but New Bing, which was released a month later, did not achieve similar success as ChatGPT.

The average number of daily searches on ChatGPT is almost double that of Bing searches, according to analytics firm YipitData.

Delicate relationship: a partner and a competitor

Someone once asked Nadella, since Microsoft has been investing in its own large language model for decades, why should it invest in OpenAI?

Nadella, he found that OpenAI is pursuing the same thing as Microsoft, and in this case, instead of training 5 different basic models, it is better to cooperate.

But the relationship between the two parties is more complicated than it appears, according to the Wall Street Journal.

There was tension and confusion among Microsoft's internal AI teams, who complained of reduced funding and were frustrated by not being able to understand the inner workings of OpenAI technologies, especially the employees who needed to integrate them into Microsoft products. They feel extra pain.

Another awkward reality is that OpenAI's and Microsoft's sales teams sometimes pitch to the same customers. This kind of drama scene is a typical infighting.

Despite this, Nadella still emphasized in the interview that Microsoft is "betting" on OpenAI, and OpenAI is also "betting" on Microsoft. Microsoft's investment in OpenAI is a "long-term stable transaction."

And Nadella announced last month that the Bing search engine will also soon be integrated into ChatGPT.

**Aside from betting on OpenAI, what else did Microsoft do right? **

As early as 2015, AlphaGo defeated Li Shishi, allowing artificial intelligence to successfully break the circle.

Google has also become synonymous with the most advanced AI technology.

It was also Google who first proposed the core technology of ChatGPT. A paper called "All you need is attention" pointed out the direction for the development of large language models.

As early as 2022, a Google engineer was directly kicked out by Google because he revealed to the outside world that Google's AI chat robot LaMDA "may have a soul".

The main reason why Google is so worried about bringing AI technology that may not be immature to the public is that the possible bias and harmful information in AI chatbots will affect Google's existing products.

After Microsoft bet on OpenAI, Google, the original AI giant, became an under dog and could only catch up.

"Woke up early, but caught up late" may be the best description of Google's performance in this AI arms race.

What did Microsoft do right?

After the debut of ChatGPT, in July 2019, Microsoft made a strategic investment of US$1 billion in OpenAI. At the same time, OpenAI used Microsoft's Azure as its exclusive cloud computing provider to jointly develop new functions.

After ChatGPT broke the circle, Microsoft instantly switched to the working mode of a start-up company, and quickly announced that it would integrate ChatGPT into important products including Bing, Office, and Teams. Microsoft CEO Nadella also told Google at the New Bing conference Officially declared war.

Compared with Google's conservative, Microsoft has taken a very different attitude towards integrating AI technology.

Even OpenAI has warned Microsoft that hasty integration of their technology may have a bad impact on Microsoft's own products.

Microsoft is still fully embracing AI.

With the release of a series of new products and features such as OpenAI GPT-4, Microsoft's stock price has also been rising.

It shows that the capital market is very optimistic about the future of "Wolf Microsoft" under the blessing of OpenAI technology.

The Grand Event of the Metaverse 2 years ago

The last time there was such a grand occasion, Microsoft announced at the end of 2021 that it would follow Meta into the Metaverse.

At that time, this move allowed Microsoft's market value to exceed 2.5 trillion US dollars, surpassing Apple in one fell swoop, and becoming the world's largest listed company in market value!

But now, the fanatical Yuan Universe of the previous year seems to have died down this year.

Two years ago, Microsoft announced that it would launch Mesh, a blockbuster product in the metaverse, which aims to create an application that allows people to collaborate remotely through AR/VR technology.

Now on Microsoft's website, it's just a simple introduction page.

It seems that in a short time, Mesh will only be used as a background function to provide technical support for the immersive VR environment for Teams and HoloLens, and will not be launched as a separate application.

At this year's Build conference, the only metaverse-related content was Avatar within Teams.

What about this effect?

Seems to be pretty much what Meta does.

As another Big Move into the metaverse, the acquisition of Activision Blizzard is now also stuck by the anti-monopoly agencies of the United States and the United Kingdom.

At present, it is difficult to complete this acquisition at least in a short period of time.

And just in March this year, Microsoft announced that it would shut down the virtual social platform AltSpaceVR before March 10.

After Microsoft's mass layoffs of 10,000 people, the metaverse social AltSpaceVR and HoloLens headset teams were hit hard, and many teams were disbanded on the spot.

It can be said that the "Metaverse" project that helped Microsoft climb to the peak of its market value two years ago has developed very difficultly.

In the words of OpenAI CEO Sam Altman, to see whether an industry is really popular or "false prosperity", we need to see whether the first batch of users can really indulge in related products and services and cannot extricate themselves.

At least my own VR headset has been useless for a while, but work and life are increasingly inseparable from ChatGPT.

Meta relies on open source, Nvidia sells shovel

In this round of upsurge, all major manufacturers are trying their best to get a share of the pie.

Meta is making money from open source AI.

If other companies are free to use and profit from the new AI software Meta is developing, then Meta will have influence over a growing number of AI developers and businesses.

It is reported that Meta is studying how to commercialize the next version of LLaMA (which can power chatbots such as ChatGPT).

The move could spark a frenzy among AI developers, too eager for an alternative to the software Google and OpenAI sell.

The Falcon open source model recently released by Abu Dhabi has attracted great attention in the AI community. This also further promoted OpenAI's decision to commercialize LLM.

However, if Meta commercializes the next version of LLaMA, it may also face copyright disputes and legal liabilities.

Another person who laughed happily was Lao Huang.

Today, the market value of Nvidia can rise as much as AI startups lack computing power.

Without NVIDIA's A100, H100, and GH200, the evolution of large models and generative AI applications will be rapid.

The influx of giants and start-ups has also made GPUs in short supply.

The founder and CEO of Mixpanel tweeted that he is willing to exchange 10% of his shares for GPU computing power worth US$150 million

For investment institutions, having computing power has become an admission ticket for investing in outstanding AI companies.

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