Microsoft Bets Big on the Creator of ChatGPT in Race to Dominate A.I.

OpenAI is led by Sam Altman, who became well known in Silicon Valley as the head the start-up builder Y Combinator. Mr. Altman, 37, and his co-founders created OpenAI in 2015 as a nonprofit. But he soon remade the venture as a for-profit company that could more aggressively pursue financing.

A year later, Microsoft invested $1 billion in the company and committed to building the supercomputer technologies OpenAI’s enormous models would demand while becoming its “preferred partner for commercializing” its technologies. OpenAI later officially licensed its technologies to Microsoft, allowing the company to directly add them to Microsoft products and services.

With backing from Microsoft, OpenAI went on to build a milestone technology called GPT-3. Known as a “large language model,” it could generate text on its own, including tweets, blog posts, news articles and even computer code.

Clunky to use, it was mostly a tool for businesses and engineers. But a year later, OpenAI began work on DALL-E, which allowed anyone to generate realistic images simply by describing what they want to see. Microsoft incorporated GPT-3, DALL-E and similar technologies into its own products.

GitHub, a popular online service for programmers owned by Microsoft, began offering a programming tool called Copilot. As programmers built smartphone apps and other software, Copilot suggested the next line of code as they typed, much the way autocomplete tools suggest the next word as you type texts or emails.

For many, it was a “jaw dropping moment” that showed what’s possible, Mr. Boyd, of Microsoft, said.

Then, at the end of last year, OpenAI unveiled ChatGPT. More than a million people tested the chatbot during its first few days online. It answered trivia questions, explained ideas and generated everything from school papers to pop song lyrics.