🤫OpenAI Snubs Microsoft

Today we will discuss:

• Sponsored: HubSpot—Elevate productivity with 100 ChatGPT prompts to automate tasks

• OpenAI ditches Microsoft for its own cloud bet—A deal with CoreWeave deepens OpenAI’s split from Microsoft and reshapes the AI cloud battle

• Sony brings AI to PlayStation NPCs—Sony is experimenting with AI-powered game characters that respond in real time

• In other AI news today— NASA’s AI rovers explore the Moon autonomously, Meta tests its first in-house AI chip, Gmail adds a Gemini-powered calendar button, and ByteDance’s AI tech boosts model training efficiency, potentially reducing Nvidia chip demand

• Don’t miss this week’s Workflow Wednesday—AI collaboration made easy with Reclaim.ai, Notion, and Anyword; now available at only $20/month! 

• Saved the best for last—9 must-try AI tools

OpenAI strikes $11.9B cloud deal, deepening split with Microsoft

Key Points 

• OpenAI signed a five-year, $11.9B deal with CoreWeave, securing cloud access and a $350M equity stake.

• The deal intensifies OpenAI and Microsoft’s shifting dynamic, as OpenAI now owns a stake in Microsoft’s former top cloud provider.

☕News – OpenAI has struck a five-year, $11.9 billion deal with cloud provider CoreWeave, securing critical computing power for its AI models. As part of the agreement, OpenAI is also receiving $350 million in CoreWeave equity, a private placement separate from the company’s upcoming IPO.

🥸Why this matters – CoreWeave, backed by Nvidia (which owns a 6% stake), operates a cloud network built for AI, with 32 data centers and over 250,000 Nvidia GPUs as of late 2024. Since then, it has expanded further, adding Nvidia’s latest Blackwell chips designed for AI reasoning.

For CoreWeave, this deal could ease investor concerns ahead of its IPO. The company has been heavily reliant on a few major customers—a risk that could complicate its plans to raise $4 billion or more. Bringing OpenAI on board in a multi-billion-dollar agreement strengthens its position.

🔥What’s got everyone buzzing – The deal also highlights the shifting relationship between OpenAI and Microsoft. Until now, Microsoft was CoreWeave’s biggest customer, responsible for 62% of its 2024 revenue, which surged to $1.9 billion from just $228.9 million the year before. Now, OpenAI is not just using the same cloud—it owns a stake in the company running it.

The timing is telling. Microsoft, OpenAI’s biggest backer, is no longer its exclusive cloud provider. The two are now competing more directly, with OpenAI pushing into enterprise sales and Microsoft developing its own AI models under the MAI brand. Microsoft also recently hired Mustafa Suleyman, a direct rival to OpenAI CEO Sam Altman. With OpenAI openly saying it's “out of GPUs,” this move secures more compute—while also sending a clear message.

Read the full story here.

Sony explores AI NPCs for PlayStation, testing prototype of Horizon’s Aloy

Key Points 

• Sony tested an AI-powered version of Aloy from Horizon Forbidden West, allowing real-time voice conversations with players.

• The system combines OpenAI’s Whisper, GPT-4, and Llama 3, with Sony’s in-house EVS and Mockingbird animation technologies.

• AI-driven NPCs are gaining traction, with Nvidia and Microsoft also developing AI-powered game characters and interactive environments.

🎮News - Sony is testing AI-powered PlayStation characters, with a prototype already in development.

An internal video, now removed, showcased an AI-driven version of Aloy from Horizon Forbidden West. In the demo, Aloy responded to player questions in real time using an AI-generated voice and facial movements, both in a controlled setting and within the full game. The system uses OpenAI’s Whisper for speech-to-text and a combination of GPT-4 and Llama 3 for conversation and decision-making.

👨‍💻What's more? Sony also has its own in-house technology at play. Its Emotional Voice Synthesis (EVS) system generates speech, while Mockingbird powers audio-to-face animation. Although the demo ran on PC, Sony has also experimented with running aspects of this AI system directly on PS5, reportedly with minimal impact on performance.

🕵️‍♂️Connecting the dots on this trend - AI-powered game characters are becoming a focus across the industry. Nvidia has been developing similar technology with its Ace project, working with Inworld AI to create Covert Protocol, a tech demo that lets players speak naturally with NPCs.

Microsoft is also exploring generative AI for gaming, partnering with Inworld AI to bring AI-driven characters and story elements to Xbox. The company’s Muse AI model is designed to help developers generate game environments for prototyping.

🤖In conclusion - As AI’s role in gaming expands, so do concerns about its impact on creativity and jobs. A recent GDC 2024 survey found that nearly half of developers are already using generative AI in some capacity. With Sony’s latest experiment surfacing just ahead of GDC next week, AI in gaming is certain to be a key topic of discussion.

Read the full story here.

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