Microsoft has signed a deal to expand its presence in the rapidly growing artificial intelligence industry beyond OpenAI.
Brad Smith, Microsoft’s president, announced a “multi-year partnership” with Paris-based Mistral Monday to help the 10-month old company bring its AI models on to the market. The deal was first announced by Mistral.
Microsoft has said that it will invest in Mistral as part of this deal. However, the financial details are not yet available. The partnership includes a research-and-development collaboration that will build applications for government agencies across Europe.
Mistral is the second company in the world to offer commercial language models for Microsoft Azure’s cloud computing platform.
Microsoft’s confidence in our model represents a significant step in our mission to bring frontier AI into everyone’s hands, said Arthur Mensch. Arthur Mensch is the co-founder and CEO of Mistral.
Microsoft has made a small investment but holds no equity in Mistral.
Microsoft has invested $13bn into OpenAI in San Francisco, an alliance which is currently being evaluated by competition authorities from the US, EU, and UK. Smith stressed that both companies are “very important partners”, but “Microsoft doesn’t control OpenAI”.
Analysts believe that other Big Tech competitors, like Google and Amazon are investing heavily in generative AI – software that can generate text, images, and code within seconds.
Smith said, “We see AI as an emerging sector of the economy. We call it the AI Economy and it will create new business categories and entirely new businesses.”
Microsoft’s chief executive Satya Nadella acknowledged recently that the Paris-based firm — founded by Mensch and Timothee lacroix, three former Meta and Google researches — was one of the innovators who built AI on Azure cloud computing platform.
Mistral, a company that builds large language model technology, the foundation of generative AI, achieved a €2bn in December, in a round of funding worth approximately €400mn.
The models are “open-source”, which means that the technical details of each model will be made public.
OpenAI, the maker of ChatGPT’s latest model GPT-4, uses a “black box” in which data and code are not made available to third-parties.
OpenAI’s recent secondary share sales last year estimated its value at $86bn.
Microsoft claims to have 1,600 AI models in its data centers, 1,500 of which are open-source. It hopes to continue supporting proprietary technology like OpenAI alongside these 1,500 open-source models.
It is extremely expensive to build the infrastructure required to train and develop AI models. Only a handful of companies can compete. Microsoft announced in the last two weeks that it had invested $5.6bn into new AI data centres in Germany and Spain, in addition to its partnership with mistral.
Smith said, in a speech at the Mobile World Congress in Barcelona, on Monday, that Microsoft would commit itself to a set of principles designed to encourage innovation and competition within AI.
He said that the larger debate that regulators will eventually focus on would be whether the infrastructure for training and developing AI models is widely available to companies who do not own data centers and cloud infrastructure, such as Microsoft Google and Amazon.
If it [wasn’t] available, it would have a negative impact on the growth of the market. Smith added, “We’re determined to make sure it is.” These principles address an important element that will be on the mind of competition regulators.
Smith predicted that there would be more investment in the design and development AI chips. This sector is led by Nvidia . Nvidia recently surpassed Alphabet, the parent company of Alphabet, Amazon, and Google to become the US’s third most valuable listed company, behind Microsoft and Apple.
Smith added that Microsoft would create its own semiconductors alongside competitors Intel and AMD.
OpenAI’s CEO Sam Altman has been in talks with Middle Eastern investors, chipmakers and Taiwan Semiconductor Manufacturing Company to launch a new chip venture.
Smith, however, said that it is “too soon” to know whether Microsoft will invest in this effort.