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.
TORONTO – Roots Corp. may have built its brand on all things comfy and cosy, but its CEO says activewear is now “really becoming a core part” of the brand.
The category, which at Roots spans leggings, tracksuits, sports bras and bike shorts, has seen such sustained double-digit growth that Meghan Roach plans to make it a key part of the business’ future.
“It’s an area … you will see us continue to expand upon,” she told analysts on a Friday call.
The Toronto-based retailer’s push into activewear has taken shape over many years and included several turns as the official designer and supplier of Team Canada’s Olympic uniform.
But consumers have had plenty of choice when it comes to workout gear and other apparel suited to their sporting needs. On top of the slew of athletic brands like Nike and Adidas, shoppers have also gravitated toward Lululemon Athletica Inc., Alo and Vuori, ramping up competition in the activewear category.
Roach feels Roots’ toehold in the category stems from the fit, feel and following its merchandise has cultivated.
“Our product really resonates with (shoppers) because you can wear it through multiple different use cases and occasions,” she said.
“We’ve been seeing customers come back again and again for some of these core products in our activewear collection.”
Her remarks came the same day as Roots revealed it lost $5.2 million in its latest quarter compared with a loss of $5.3 million in the same quarter last year.
The company said the second-quarter loss amounted to 13 cents per diluted share for the quarter ended Aug. 3, the same as a year earlier.
In presenting the results, Roach reminded analysts that the first half of the year is usually “seasonally small,” representing just 30 per cent of the company’s annual sales.
Sales for the second quarter totalled $47.7 million, down from $49.4 million in the same quarter last year.
The move lower came as direct-to-consumer sales amounted to $36.4 million, down from $37.1 million a year earlier, as comparable sales edged down 0.2 per cent.
The numbers reflect the fact that Roots continued to grapple with inventory challenges in the company’s Cooper fleece line that first cropped up in its previous quarter.
Roots recently began to use artificial intelligence to assist with daily inventory replenishments and said more tools helping with allocation will go live in the next quarter.
Beyond that time period, the company intends to keep exploring AI and renovate more of its stores.
It will also re-evaluate its design ranks.
Roots announced Friday that chief product officer Karuna Scheinfeld has stepped down.
Rather than fill the role, the company plans to hire senior level design talent with international experience in the outdoor and activewear sectors who will take on tasks previously done by the chief product officer.
This report by The Canadian Press was first published Sept. 13, 2024.
VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, are set to resume today as a strike that has stopped most services drags into a second week.
No timeline has been set for the length of the negotiations, but Joe McCann, president of the Amalgamated Transit Union Local 1724, says they are willing to stay there as long as it takes, even if talks drag on all night.
About 600 employees of the door-to-door transit service for people unable to navigate the conventional transit system have been on strike since last Tuesday, pausing service for all but essential medical trips.
Hundreds of drivers rallied outside TransLink’s head office earlier this week, calling for the transportation provider to intervene in the dispute with Transdev, which was contracted to oversee HandyDART service.
Transdev said earlier this week that it will provide a reply to the union’s latest proposal on Thursday.
A statement from the company said it “strongly believes” that their employees deserve fair wages, and that a fair contract “must balance the needs of their employees, clients and taxpayers.”
This report by The Canadian Press was first published Sept. 12, 2024.
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
