# Microsoft and OpenAI flirted, dated, and are now making money together.

**Published by:** [Durwin](https://paragraph.com/@durwin/)
**Published on:** 2023-01-31
**URL:** https://paragraph.com/@durwin/microsoft-and-openai-flirted-dated-and-are-now-making-money-together

## Content

Microsoft made the strategic move of the century and you know it.Microsoft is acquiring 49% of OpenAI. They are paying up to $10B, making OpenAI worth more than $29B. Don’t ask about the maths, most of it are projections and estimates. Just know that the nonprofit that owns ChatGPT is worth a close to $30B and Microsoft is paying big money for it. For comparisons, here are some companies worth that amount:Canva ($40B)Revolut ($33B)Epic Games / Fortnite maker ($32)Databricks ($31B)Fanatics ($31B)Just a quick recap on the history of the two companies. OpenAi was started by a bunch of tech legends like Elon Musk (yes, I know, he is everywhere!) and Sam Altman .etc. Back then they needed lots of cloud computing and data storage. So they made a deal with Microsoft in 2019.When geniuses meet: Satya Nadella & Sam AltmanThey would invest $1B into OpenAI in cash and Azure credits. That is a genius and strategic move. Azure was competing with AWS and Google Cloud for market share. Snagging a huge client that is data and cloud storage hungry like OpenAI is an enormous win. So Azure gets a boost, snags a sexy up-and-coming client and Microsoft can have equity in a potential rocketship startup. A semi-risky but very calculated bet. That paid off BIG TIME. Microsoft and OpenAI was the partnership no one saw coming. They flirted, dated, had fun and now they making money together. With the crazy launch of ChatGPT, OpenAI went mainstream and now everyone is on full alert.ChatGPT, with its incredible capabilities and functionality, really took the world by storm.Google is in “Code Red”, whatever that means. Bing gets a refresh and supercharged with ChatGPT. ChatGPT will reportedly be imbued into all of Microsoft’s tech stack. That means Word, Excel, Outlook and Office .etc. MS office has 1.4 billions users worldwide 🤯 That is a legitimate game-changer. ChatGPT, had a million users in 5 days! It took me 6 days to research and write this article! Just kidding. Microsoft did a masterstroke with OpenAI. We can all learn a thing or two.Deal-making is a crucial tool in every CEO’s arsenal.Deal-making is a secret skill that goes on behind closed doors especially in huge corporations that we rarely get to observe till it leaks to the press. It is what separates a good CEO from a great one. They can make bold assumptions from limited information. They can see far into the future, even though they seem to be standing exactly the same place as the rest of us. They can read between, under and around the lines to negotiate for things that gives them the edge in the long-run. It is such a fascinating skill that I would love to see play out in real-time. The success story of OpenAI and Microsoft. It goes to show that partnering up with the right partner can lead to really amazing things. And it’s only going to get better from here on out!Open you mind to the possibilities of what generative AI can bring to our future.It did get some people asking some interesting questions: “If the OpenAI business is so great, why are they giving up so much equity to Microsoft?” “Does Sam knows something we all don’t yet?” “OpenAI is nonprofit, is it right for MS to own so much of it?” Who knows. Perhaps another OpenAI or even another one created entirely by AI, will surface to take its place. All I know is that Microsoft just did a phenomenal deal and their shareholders will be so happy. Sam Altman is also a winner, having such a massive, game-changing tech unicorn under his belt at such a young age. - Was Microsoft smart to buy 49% of OpenAI? - #startups #business #startupx #growth #success #socialmedia #culture #entrepreneurship #strategy #eth #btc #crypto #AI #generativeAI #openai #NFT #microsoft #satyanadella #samaltman #paulgraham #dealmaking #negotiation #strategy

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