Welcome to the AI Era (Premium)

It’s happening: Microsoft CEO Satya Nadella has effectively announced a new era of computing based on AI, and it will transform both his company and the industry.

Microsoft’s AI pivot, at least what we’ve seen publicly, seemingly happened as dramatically and quickly as the sudden advent of Open AI-based technologies like ChatGPT, DALL-E, and VALL-E, thrusting us into the AI era. And as I speculated recently in Maybe AI is the Next Wave (Premium), the software giant’s decisive embrace of this technology could help it emerge as a leader of the most important technology wave since the advent of personal computing.

Asked during a panel at the World Economic Forum’s annual event in Davos, Switzerland how customers might see these technologies appear across the Microsoft stack in the short term, Nadella cited the initial ways in which his firm will commercialize this technology: first through the Azure Open AI service that was announced today, then by making a ChatGPT API for developers, and then by adding these capabilities to “every Microsoft product.” In other words, Microsoft will become the AI company.

But this didn’t happen overnight, even though it feels like that. Instead, it started with years of work. (And, it should be noted, billions in investments.)

“At Microsoft, the one thing that is probably worth stating is that this thing, ChatGPT and the GPT family of models, didn’t just happen,” he said. “We’ve been partnering with Open AI deeply for multiple years. And we built, in Azure, our public cloud infrastructure, an AI supercomputer. Which, by the way, as a systems architecture has been a massive breakthrough because the way these workloads, or the way you train large models, is very different than anything out there. It’s a much more large-scale, synchronous, distributed job. So we have to build the system---from storage to compute to network---that really allowed us to even build this capability.”

“So at this point, the way Microsoft’s really going to commercialize all this is that Azure is going to become the place for anybody and everybody who thinks about AI and large-scale training,” he continued. “And we are way ahead on that, and we continue to plan to really step it up there.”

“Second, we want to make these foundational models available as platforms,” he said, highlighting Microsoft’s core competency. “So that means that anybody who wants to build on them, in any domain, can build on top of that. Soon. Today, in fact, we just made the Azure Open AI service available generally. And then even ChatGPT will be available as an API, and so we’re very, very excited about that. And we will even incorporate this in our own applications. So you can fully expect that every product of Microsoft will have some of the same AI capabilities completely transform the product.”

This is an exciting vision of the future. But the advent of Open AI, ChatGPT, and its other AI-...