Microsoft Corp. is investing US$10 billion in OpenAI, whose artificial intelligence tool ChatGPT has lit up the internet since its introduction in November, amassing more than a million users within days and touching off a fresh debate over the role of AI in the workplace.
The new support, building on US$1 billion Microsoft poured into OpenAI in 2019 and another round in 2021, is intended to give Microsoft access to some of the most popular and advanced artificial intelligence systems. Microsoft is competing with Alphabet Inc., Amazon.com Inc. and Meta Platforms Inc. to dominate the fast-growing technology that generates text, images and other media in response to a short prompt.
At the same time, OpenAI needs Microsoft’s funding and cloud-computing power to crunch massive volumes of data and run the increasingly complex models that allow programs like DALL-E to generate realistic images based on a handful of words, and ChatGPT to create astonishingly human-like conversational text.
While Microsoft didn’t give details of the new investment, a person familiar with the discussions, who asked not to be identified because the information isn’t public, said it totals US$10 billion over multiple years. The shares gained 1 per cent to US$242.58 in New York on Monday.
The deal will give a boost to Microsoft’s Azure cloud, while providing OpenAI with additional specially designed supercomputers to run its complex AI models and fuel its research. Microsoft plans to use OpenAI’s models throughout consumer and corporate products and release new categories of products based on OpenAI’s work, the two companies said in blog posts.
The Azure usage fueled by this deal is key for Microsoft as it battles to expand that business, said Bloomberg Intelligence analyst Anurag Rana. “This could even help Microsoft close the gap further with AWS,” he said, referring to Amazon’s market-leading cloud service.
OpenAI noted on Monday that it uses Microsoft’s cloud-based service Azure to train all of its models and that Microsoft’s investment will allow it to accelerate its independent research. Azure will remain the exclusive cloud provider for OpenAI, the company said.
As with Microsoft’s previous investment in OpenAI, much of the value of the deal will take the form of Microsoft giving OpenAI the Azure cloud-computing horsepower needed to run its AI systems, said two people familiar with the deal.
The deal has a complicated structure because investors in OpenAI are limited in the return on their investment since it is a capped-for profit company. Microsoft will get nearly half of OpenAI’s financial returns until its investment is repaid up to a predetermined cap, one of the people said. All profits beyond what is owed to investors and employees are returned to OpenAI, which is governed by the OpenAI non-profit organization.
Microsoft earlier this month said it planned to add ChatGPT to Azure and announced the broad availability of its Azure OpenAI Service, which has been an option to a limited set of customers since it was unveiled in 2021. The service gives Microsoft’s cloud customers access to various OpenAI tools like the GPT-3.5 language system that ChatGPT is based on, as well as the DALL-E model for generating images from text prompts. That enables Azure customers to use the OpenAI products in their own applications running in the cloud.
Microsoft itself is currently using the developer’s language AI to add automation to its Copilot programming tool, and wants to add such technology to its Bing search engine, Office productivity applications, Teams chat program and security software. The Redmond, Washington-based company is putting DALL-E into design software and offering it to Azure cloud customers.
Chief Executive Officer Satya Nadella is deepening Microsoft’s ties with OpenAI as Google, which has long been essentially untouchable in search, suddenly appears vulnerable. The Alphabet unit’s prevailing model of keyword queries uses search engines to comb the web for specific terms, and then lets users make their own decisions as to what information is useful.
By contrast, ChatGPT responds to questions about topics such as political science and computer programming with detailed explanations, and its question-and-answer format means users can drill down until they fully understand. The bot is capable of responding to queries in a natural and human-like manner, carrying on a conversation and answering follow-up questions, unlike the basic list of blue links that a Google search provides.
But ChatGPT has disadvantages compared with that old-school list of links. Unlike a search on Google or Bing, ChatGPT currently offers no context about where it sourced the information used to build its answers, and OpenAI acknowledges that the tool’s responses can be incorrect and shouldn’t be relied on as accurate.
At US$10 billion the latest investment into OpenAI easily tops any of Microsoft’s investments to date, according to data compiled by Bloomberg, including the US$5 billion it spent to buy AT&T Inc. stock in 1999 in exchange for access to new cable networks, and the US$1 billion stake it took in Comcast Corp. in 1997.
The dollar amount would also top all but three acquisitions Microsoft has made in recent years. Microsoft is seeking antitrust approval for a US$69 billion purchase of video-game maker Activision Blizzard Inc., and in 2016 spent US$26 billion to buy professional networking site LinkedIn. Last year, Microsoft completed its US$20 billion purchase of Nuance Communications Inc., an AI company specializing in voice recognition and related software and services in the health care field.
News of the investment comes less than a week after Microsoft said it’s laying off 10,000 workers as a weakening economy crimps software demand. Microsoft noted in that announcement that it will still invest and hire in key priority areas. The software maker reports fiscal second-quarter earnings on Tuesday.
A shortage of pilots is making travel chaos in Canada even worse – CBC News
From pandemic-related travel restrictions to extreme weather events, Canada’s travel industry has navigated an unprecedented amount of uncertainty of late. And now, just as demand for travel has returned to its 2019 level, airlines are navigating their next patch of turbulence: a lack of qualified pilots.
According to Transport Canada, in a typical pre-pandemic year, roughly 1,100 pilot licences were issued. When complemented by foreign-trained pilots, that was generally more than enough to satisfy the needs of carriers as large as WestJet and Air Canada, all the way down to regional, charter and cargo airlines.
But as demand for flying collapsed in 2020, so did the number of new pilots getting their paperwork. Government data shows less than 500 licences were awarded in 2020, a figure that fell to less than 300 in 2021 and just 238 last year.
The department told CBC News in a statement that while labour shortages in the airline sector has been “identified as a priority area for action,” there are no current plans to loosen regulations. But the agency says it’s doing what it can to “increase the competitiveness of the Canadian flight training industry as well as improve the viability of aviation careers to address any shortages.”
Whatever changes do come will do little to help anyone in the short term, and travellers are already seeing the impact of the industry’s current labour crunch.
Staff shortages were a factor in charter airline Sunwing’s cancellation of 67 flights over the last two weeks of December, along with extreme weather.
Salaries for experienced pilots generally go up faster and higher at the major airlines than they do at most others, they are so typically able to have their pick among those available. That causes shortages just about everywhere else.
The head of the Air Transport Association of Canada says it’s a problem that had been brewing for many years, even before the pandemic.
“We haven’t had enough pilots for a long time, mostly at the regional level,” John McKenna said.
Long, expensive process
Getting a commercial licence is the last step in a multi-year process of becoming a pilot, a journey that can cost tens of thousands of dollars and take years.
In Canada, for many that journey ends with a dream job at either WestJet or Air Canada, but because of the expense and time commitment of training a new pilot, the major airlines often hire top staff from smaller carriers instead of methodically developing their own.
“Their fishing grounds is the regional carriers. And the regional carriers go down to the smaller carriers, air taxi groups … those levels have been hurting for many years,” McKenna said.
Canada’s two biggest airlines told CBC News in emailed statements that while there is indeed a higher than normal demand for pilots right now, both of them are managing to meet their needs.
“As a large global carrier operating the most modern, largest aircraft, we are a very desirable destination for talented pilots,” AIr Canada said. “As a result, we are able to attract pilots as required.”
“We have and continue to responsibly manage and plan our operations to meet the anticipated demand of our guests and are fully staffed across our network to support our operation,” WestJet said.
That’s not the case for everyone else. Small airlines often have so few pilots on staff that it doesn’t take the loss of very many to stop planes from flying.
In the fall, Sunwing applied to bring in more than 60 temporary foreign workers to meet demand for pilots, but that application was rejected, which exacerbated the chaos seen at the end of 2022. The airline has since cancelled almost all flights out of Saskatchewan and most out of Manitoba for the rest of the winter travel season.
Pandemic reduced numbers, too
It’s not just the big boys gobbling up all the qualified pilots, either. Many simply left the profession during the pandemic.
“Two years ago, to the day, literally almost every pilot [was] out of work,” says Dave Boston, a pilot with 25 years experience who’s also the man behind Edmonton-based aviation job board, Pilot Career Centre.
Faced with furloughs and layoffs at airlines big and small, many pilots tried to wait it out, but many simply moved on, he told CBC News in an interview.
“Many who had businesses or other interests, after maybe six months to a year, had to put food on the table, and they left the industry,” Boston said.
For the pilots who are left, headhunting is the new normal. He says he hears from desperate airlines every day, because they either can’t find the staff, or just lost yet another one. “It’s very common for pilots, unfortunately, to work there for six months [then] get a surprise interview that they don’t expect to get, and then they’re gone,” he said.
“It’s a real challenge right now.”
One person hoping to meet that challenge is Zona Savic, a soon-to-be graduate of one of Canada’s premier aviation schools, Seneca College in Peterborough, Ont.
While she had planned to go into engineering, she joined the Air Cadets while in high school, and was quickly bitten by the aviation bug.
“I just knew from the moment that I was in that plane, this is what I was going to do,” she told CBC News in an interview.
She’s on track to get her pilot’s licence soon, and while she may do additional training to become an instructor herself, she says it’s a load off her mind to know that she won’t have to worry about finding a job.
And even better for the industry, she has no qualms about working her way up at smaller carriers flying niche, remote routes.
” I just love the feeling of flying, so if that’s what I’m doing, I don’t really care if I’m in Paris, or in Nunavut,” she says. “Anything is good for me, as long as I get to experience that.”
Q4 economic growth slows to 1.6% as aggressive hikes bite – BNN Bloomberg
Canada’s economy geared down at the end of 2022, growing at about half the pace of the third quarter and setting the stage for a period of little to no growth.
Preliminary data suggest gross domestic product was flat in December as increases in retail, utilities and the public sector were offset by decreases in the wholesale, finance and oil and gas industries, Statistics Canada reported Tuesday in Ottawa. That followed a 0.1 per cent gain in November, which matched economist expectations in a Bloomberg survey, and a 0.1 per cent increase in October.
Overall, the monthly gains point to annualized growth in the fourth quarter of 1.6 per cent, according to an initial estimate from the statistics agency. Though it will likely be revised, it’s down sharply from a 2.9 per cent pace in the third quarter, 3.2 per cent during April to June, and 2.8 per cent in the first three months of last year.
The numbers show that higher interest rates, which have jumped 425 basis points since last March, are slowing economic activity and weighing on consumption. The lagged effects of the Bank of Canada’s aggressive tightening campaign are expected to drag growth to a halt this year, with economists seeing two quarters of shallow contraction in the first half of 2023.
That’s a key reason why Governor Tiff Macklem and his officials said this month they plan to hold the benchmark overnight lending rate at 4.5 per cent if growth and inflation evolve broadly in line with their outlook. While the 1.6 per cent growth in the final quarter is slightly stronger than policymakers forecast last week, signs of slowing demand are mounting.
“The economy hasn’t yet absorbed the impact of past rate hikes,” James Orlando, an economist at Toronto-Dominion Bank, said in a report to investors. “Even though today’s growth numbers are holding up well, the BoC can feel comfortable keeping its policy on cruise control a little while longer.”
In November, growth in services-producing industries was partially offset by a decline in the goods sectors, the statistics agency said. Interest-rate increases continued to dampen activity for real estate agents and brokers, residential building construction, and legal services which have been trending downward since spring.
Construction dropped 0.7 per cent, with new construction of single detached homes and home improvement leading the decline. Accommodation and food services contracted 1.4 per cent on lower activity in bars and restaurants. Retail trade decreased 0.6 per cent, with the food and beverage subsector falling to its lowest level since April 2018.
The central bank expected fourth-quarter growth of 1.3 per cent annualized, while economists in Bloomberg surveys predicted a gain of 0.9 per cent. Official data for December and the fourth quarter will be released Feb. 28.
Based on initial estimates, Canada’s economy expanded 3.8 per cent in 2022, broadly in line the Bank of Canada’s estimate for a 3.6 per cent growth.
“The overriding message is that the economy is just managing to keep its head above water, which squarely fits with the BoC’s view,” Doug Porter, chief economist at Bank of Montreal, said in a report to investors.
Nike sues Lululemon, says footwear infringes patents – CTV News
Nike sued Lululemon Athletica on Monday, saying that at least four of the Canadian athletic apparel company’s footwear products infringe its patents.
Nike in a complaint filed in Manhattan federal court said it has suffered economic harm and irreparable injury from Lululemon’s sale of its Blissfeel, Chargefeel Low, Chargefeel Mid and Strongfeel footwear.
Nike said its three patents at issue concern textile and other elements, including one addressing how the footwear will perform when force is applied.
The Beaverton, Oregon-based company is seeking unspecified damages.
Lululemon, based in Vancouver, British Columbia, did not immediately respond to requests for comment.
(Reporting by Jonathan Stempel in New York; editing by Christopher Cushing)
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