Microsoft's $10 billion ChatGPT bet gives it a big edge in the cloud wars

Microsoft's $10 billion bet on ChatGPT's maker gives it a powerful new weapon in the cloud wars with Amazon and Google

Microsoft opened Wednesday with a 4% share price drop after the firm gave a tough outlook for its cloud business during third-quarter earnings Tuesday. But the company has a longer-term strategic weapon that could help it win the cloud wars: its once-in-a-generation bet on OpenAI.

Microsoft CEO Satya Nadella — who once ran its cloud division — accordingly provoked some of this angst as he warned that the firm's Azure customers were beginning to"optimize" their cloud spend after a pandemic binge. Microsoft's gamble, essentially, is that everyone will need and use artificial intelligence in the near future — and that means increased demand and cash for the computing power to train AI models.

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