3 ms·

OpenAI is a textbook example of having fun by burning cash. Nobody doubts it’s “cool.” Lots of people questioning if there’s an actual business there.

by JCM9 1y ago

impossiblefork 1y ago
I think it makes Microsoft feel bigger though. If Microsoft were just Windows, Teams, Azure, Bing and whatever it is, Microsoft would actually feel like a competitor for firms like Canonical or Red Hat or SUSE which happens to be big but nothing special relative to the others, whereas it now, with with this very public service feels like a behemoth.
- Insanity 1y ago
  Huh, that’s a funky statement because having “Azure”, one of the largest Cloud Providers outside of China is definitely a different camp than Canonical, Red Hat and SUSE. Although I don’t particularly like their cloud services they are undeniably an important part of Microsoft’s business. (And they also own a large chunk of the gaming industry nowadays).
  - Forgeties79 1y ago
    >(And they also own a large chunk of the gaming industry nowadays). They’re shuttering half their studios, cancelling half their games, and firing game devs by the thousands as they hand halo over to PlayStation lol. You’re technically right but they clearly aren’t taking that part of their business seriously anymore. IIRC Gamepass has plateaued on subscribers for years now even prior to their very aggressive price hikes over the last 18 months. I saw an article the other day that said Microsoft is telling developers they have to have a 30% return on their games, which is almost double the industry standard. That’s just absurd. Edit: worth mentioning that you have people openly speculating at this point that they might not even make another Xbox. I’m not quite in that camp, but I also think it is a distinct possibility given the back slide they are clearly in right own when it comes to gaming. Fun fact: It’s been 4 console cycles, almost 25 years, since we saw a major player drop out.
    - Insanity 1y ago
      Yeah, you're right on all those fronts.. but they do own some large IP like Call of Duty which will continue to generate money for them for the foreseeable future. I did hear the speculation about Xbox as well and I hope it's not true. I quite like the Xbox as a console (Series X was the first one I bought, used to be on PlayStation before that). Competition is good for the console space, and Nintendo and PlayStation aren't really competitors IMO. The audience for Switch and PS/Xbox isn't the same.
      - Forgeties79 1y ago
        Yeah I’d be bummed too. I think they were on to something with the Series S (my Xbox currently) in particular but they blew whatever interest they had at the start. For $300 it’s been a fantastic investment, even though it’s collecting dust now.
    - alexjplant 1y ago
      > firing game devs by the thousands as they hand halo over to PlayStation They kind of took it from Apple to begin with. We almost had Halo on the iMac before Microsoft acquired Bungie [1]. [1] https://www.youtube.com/watch?v=6eZ2yvWl9nQ https://www.youtube.com/watch?v=6eZ2yvWl9nQ
      - Forgeties79 1y ago
        Very familiar with that actually! Apple abandoned halo and Bungie, desperate for money, signed with M$. Hence the change 3rd to 1st person!
        alexjplant 1y ago
        I'd no idea about this... any good additional reading? I'm a big Marathon fan and will likely try and finish Infinity over the holidays.
        Forgeties79 1y ago
  - impossiblefork 1y ago
    Yes, of course those things are huge, but I was focused on perceptions. Suddenly Microsoft has gone from being some software to being everywhere. I know that Azure is huge, but you don't see Azure.
- noir_lord 1y ago
  I think you might be right but the other side of it is that Microsofts business outside of AI is mature other than their lock on the windows desktop you listed the others :- Windows competitors are OSX (and the very good Apple hardware), Linux (which thanks to Valve is gaining users at an increased rate). Teams competes against Slack/Discord Azure competes against AWS/GCP. Bing "competes" against Google Search While they do have a share of each (and a big share of the desktop) they don't really have anywhere they can grow, they've filled their existing niches and are competing with other equally sized companies in all of them. So spaffing some cash on AI on the off chance it pays off down the line might look smart. Hell if AI does pay off then they look good and if it doesn't, it'll look bad for everyone who invested and they can at least shrug off the cash hit.
datavirtue 1y ago
Microsoft already has a new business out of the deal. OpenAI can now be extinguished at the earliest convenience.
lukeschlather 1y ago
I definitely think fundamental research is fun, I think it's unfortunate that people are so focused on quarterly profits that they think Microsoft shouldn't be investing in fundamental research. And are deriding it as "cool" as if that were a bad thing.
- justapassenger 1y ago
  You can invest in a fundamental research without investing in a company creating tons of weird circular financial deals.
- justsid 1y ago
  That's not how any of this is sold though. Google did a lot of fundamental research quite publicly in this space for many years, and people were generally quite favourable of this and didn't ask to see insane revenue from it (yet). But Microsoft is not doing that, not even by proxy of funding OpenAI. They are selling it as the greatest business thing ever, so where are the numbers to back that?
  - tcmart14 1y ago
    Not to mention also shoving it into every product even without a solid reason or use case for it. Microsoft has been making AI the focal point of everything they do recently. Google spend years investing in fundamental research into AI while not making it the focal point of everything they did.

OpenAI is a textbook example of having fun by burning cash. Nobody doubts it’s “cool.” Lots of people questioning if there’s an actual business there.

by JCM9 1y ago

OpenAI is a textbook example of having fun by burning cash. Nobody doubts it’s “cool.” Lots of people questioning if there’s an actual business there.

impossiblefork 1y ago

I think it makes Microsoft feel bigger though. If Microsoft were just Windows, Teams, Azure, Bing and whatever it is, Microsoft would actually feel like a competitor for firms like Canonical or Red Hat or SUSE which happens to be big but nothing special relative to the others, whereas it now, with with this very public service feels like a behemoth.

Insanity 1y ago
Huh, that’s a funky statement because having “Azure”, one of the largest Cloud Providers outside of China is definitely a different camp than Canonical, Red Hat and SUSE. Although I don’t particularly like their cloud services they are undeniably an important part of Microsoft’s business. (And they also own a large chunk of the gaming industry nowadays).
- Forgeties79 1y ago
  >(And they also own a large chunk of the gaming industry nowadays). They’re shuttering half their studios, cancelling half their games, and firing game devs by the thousands as they hand halo over to PlayStation lol. You’re technically right but they clearly aren’t taking that part of their business seriously anymore. IIRC Gamepass has plateaued on subscribers for years now even prior to their very aggressive price hikes over the last 18 months. I saw an article the other day that said Microsoft is telling developers they have to have a 30% return on their games, which is almost double the industry standard. That’s just absurd. Edit: worth mentioning that you have people openly speculating at this point that they might not even make another Xbox. I’m not quite in that camp, but I also think it is a distinct possibility given the back slide they are clearly in right own when it comes to gaming. Fun fact: It’s been 4 console cycles, almost 25 years, since we saw a major player drop out.
  - Insanity 1y ago
    Yeah, you're right on all those fronts.. but they do own some large IP like Call of Duty which will continue to generate money for them for the foreseeable future. I did hear the speculation about Xbox as well and I hope it's not true. I quite like the Xbox as a console (Series X was the first one I bought, used to be on PlayStation before that). Competition is good for the console space, and Nintendo and PlayStation aren't really competitors IMO. The audience for Switch and PS/Xbox isn't the same.
    - Forgeties79 1y ago
      Yeah I’d be bummed too. I think they were on to something with the Series S (my Xbox currently) in particular but they blew whatever interest they had at the start. For $300 it’s been a fantastic investment, even though it’s collecting dust now.
  - alexjplant 1y ago
    > firing game devs by the thousands as they hand halo over to PlayStation They kind of took it from Apple to begin with. We almost had Halo on the iMac before Microsoft acquired Bungie [1]. [1] https://www.youtube.com/watch?v=6eZ2yvWl9nQ https://www.youtube.com/watch?v=6eZ2yvWl9nQ
    - Forgeties79 1y ago
      Very familiar with that actually! Apple abandoned halo and Bungie, desperate for money, signed with M$. Hence the change 3rd to 1st person!
      - alexjplant 1y ago
        I'd no idea about this... any good additional reading? I'm a big Marathon fan and will likely try and finish Infinity over the holidays.
        Forgeties79 1y ago
- impossiblefork 1y ago
  Yes, of course those things are huge, but I was focused on perceptions. Suddenly Microsoft has gone from being some software to being everywhere. I know that Azure is huge, but you don't see Azure.
noir_lord 1y ago
I think you might be right but the other side of it is that Microsofts business outside of AI is mature other than their lock on the windows desktop you listed the others :- Windows competitors are OSX (and the very good Apple hardware), Linux (which thanks to Valve is gaining users at an increased rate). Teams competes against Slack/Discord Azure competes against AWS/GCP. Bing "competes" against Google Search While they do have a share of each (and a big share of the desktop) they don't really have anywhere they can grow, they've filled their existing niches and are competing with other equally sized companies in all of them. So spaffing some cash on AI on the off chance it pays off down the line might look smart. Hell if AI does pay off then they look good and if it doesn't, it'll look bad for everyone who invested and they can at least shrug off the cash hit.

datavirtue 1y ago

Microsoft already has a new business out of the deal. OpenAI can now be extinguished at the earliest convenience.

lukeschlather 1y ago

I definitely think fundamental research is fun, I think it's unfortunate that people are so focused on quarterly profits that they think Microsoft shouldn't be investing in fundamental research. And are deriding it as "cool" as if that were a bad thing.

justapassenger 1y ago
You can invest in a fundamental research without investing in a company creating tons of weird circular financial deals.
justsid 1y ago
That's not how any of this is sold though. Google did a lot of fundamental research quite publicly in this space for many years, and people were generally quite favourable of this and didn't ask to see insane revenue from it (yet). But Microsoft is not doing that, not even by proxy of funding OpenAI. They are selling it as the greatest business thing ever, so where are the numbers to back that?
- tcmart14 1y ago
  Not to mention also shoving it into every product even without a solid reason or use case for it. Microsoft has been making AI the focal point of everything they do recently. Google spend years investing in fundamental research into AI while not making it the focal point of everything they did.