Some of the world’s biggest technology investors have lined up to bet on artificial intelligence pioneer OpenAI. They will be banking on a big return.
Late last week, artificial intelligence pioneer OpenAI closed the book on its $US6.5 billion latest funding round, a raising reportedly massively oversubscribed. Its new investors are betting that the first mover in the scramble to develop generative AI will dominate the fledgling industry and its eventual profits.
Apple, Nvidia, Microsoft and the United Emirates-sponsored AI investment fund, MGX are also apparently in that queue, which reportedly contained several billions of dollars more than OpenAI was seeking to raise. It was originally conceived as a not–for-profit that would maximise the benefits of AI to humanity rather than the more conventional commercial goal of maximising profits.The strain of funding development of its AI products, however, forced it to create a for-profit subsidiary in 2019, governed by the non-profit board.
OpenAI might be the industry leader at present – it has just released its latest models, which it claims can reason and can solve difficult maths, coding and science problems – but hard on its heels are mega-technology companies like Google, Meta, Amazon and even its own core investor, Microsoft, which has an AI development unit of its own.
It is investing more than $US5 billion a year while incurring increasing losses as the cost of developing ever more complex models increases. There’s clearly a market for AI products at present, albeit a relatively small and unprofitable one today. The size and economics of the eventual market is, however, unknown and unknowable at this earliest phase in AI’s development and may remain a matter for speculation for some years to come.
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