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AInsights: Microsoft Developing Its Own AI Model with MAI-1; Serves as a Competitive Lesson for All Businesses

AInsights: Your executive-level insights on the latest in generative AI

Microsoft is perhaps building one of the most prolific genAI investment portfolios of any company out there. The company is a deep investor ($10 billion) in OpenAI. OpenAI not only powers ChatGPT, but also Microsoft’s Copilot. Microsoft recently invested in French startup Mistral. The company also just pseudo-acquired Inflection AI, appointing co-founder Mustafa Suleyman as its CEO of consumer AI.

Compare this to Apple, one of most innovative companies in the world, who let the genAI revolution pass it by. In fact, after exploring ChatGPT, Apple executives believe Siri feels antiquated in comparison, warranting an urgent M&A or partnership strategy to compete.

Now, Microsoft is reportedly working on a new large-scale AI language model called MAI-1 according to The Information. The effort is led by Suleyman. Just as a reminder, Microsoft acquired Inflection’s IP rights and hired most of its staff, including Suleyman, for $650 million in March.

MAI-1 is Microsoft’s first large-scale in-house AI model, marking a departure from its previous reliance on OpenAI’s models. With around 500 billion parameters, it is designed to compete with industry leaders like OpenAI’s GPT-4 (over 1 trillion parameters) and Meta’s Llama 2 models (up to 70 billion parameters).

The pressure may be in part due to its position in the market as less than self-reliant. This comes after internal emails revealed concerns about Microsoft’s lack of progress in AI compared to competitors like Google and OpenAI.

For executives, Microsoft’s move highlights the strategic importance of investing in AI and the need to stay competitive in this rapidly evolving space. It also emphasizes the value of acquiring top AI talent and leveraging strategic acquisitions to accelerate in-house AI development. As the AI arms race continues, executives must carefully navigate the ethical and legal challenges while capitalizing on the opportunities presented by these transformative technologies.

These are lessons for all companies leaning on AI to accelerate business transformation and growth. If Apple and Microsoft are pressured to innovate, imagine where you company is on the spectrum of evolution.

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