Microsoft confirms multibillion-dollar investment in ChatGPT developer​

By Jake Rickman​

What do you need to know this week?

Bubbling rumours that Microsoft was poised to acquire a stake in OpenAI, the developer of ChatGPT, surfaced on Monday when the software giant announced it would inject a “multibillion-dollar investment” into the tech upstart.

As the FT reports, the investment will be structured as a “multi-year” agreement, reportedly valued in the range of $10bn – $29bn.

ChatGPT, which was released to the public in November 2022, is the most advanced form of “generative learning” AI technology in the public domain. It was created by feeding a chatbot a massive domain of language models to train it so that it can respond to complex and technical user queries in real time with an unparalleled degree of sophistication.

For instance, ChatGPT was able to eke out a B- in one of the Wharton School of Business, University of Pennsylvania’s MBA modules. A researcher at Wharton —widely regarded as one of the world’s best business schools — concluded that the results demonstrate “a remarkable ability to automate some of the skills of highly compensated knowledge workers in general and specifically the knowledge workers in the jobs held by MBA graduates including analysts, managers, and consultants.”

Why is this important for your interviews?

ChatGPT has arguably been one of the most disruptive pieces of tech to emerge on the scene for some time. The consensus is that ChatGPT demonstrates the extraordinary steps AI technology has undergone in a comparatively short period. As a result, investors are tracking the use cases for the technology closely, especially given the waning investor sentiment in crypto and blockchain technologies.

Microsoft, for one, is clearly impressed. Its investment in the insurgent technology group could give it a head start in refining the technology for commercial applications compared to other Big Tech firms like Apple, Google, and Facebook/Meta. Nor is this Microsoft’s only recent investment in diversified technologies. Last December, we reported on the fact that it had gained a minority stake in the London Stock Exchange’s holding company as part of its efforts to grow its position in the financial data markets. Clearly, Microsoft has ambitions to stay competitive in the next generation of computing and technology markets.

Separately, if horses could talk, would they have scoffed at the idea of being replaced by the automobile? Some believe the technology underlying ChatGPT may disrupt the legal industry to the extent that the profession is threatened, whereas others are less concerned and cite “trust, security, and cost concerns” as reasons why commercial lawyers are unlikely to go the way of horses.

In an interview context, tracking the business use cases for ChatGPT and the opportunities and/or threats it poses to the business of law firms can be good fodder. Law firms already employ legal tech that uses natural language models in document review projects to cut down on the time needed for fee-earners to review documents individually.

How is this topic relevant to law firms?

While there is no news in the public channel yet as to which firms are representing OpenAI and Microsoft, elite American firm Simpson Thacher advised Microsoft on its buyout of video game publisher Activision Blizzard last year with the support of Skadden.