In the past two decades, Microsoft has successfully cracked the code for personal computing, long striving to go above and beyond. Their strides in AI have been quite dramatic over the past year or so.
In a podcast, CEO Satya Nadella reminded the public that he envisioned Microsoft being at the forefront of AI nearly a decade ago, in 2014. “I am here for the same reason I think most people join Microsoft – to change the world through technology that empowers people to do amazing things,” he said.
When appointed CEO, he wrote in an internal memo: “I believe that over the next decade, computing will become even more ubiquitous, and intelligence will become ambient.”
Nadella reminisced about Microsoft’s attempts to bring the best products to the market, eventually getting the browser game right with Edge and winning the cloud market, albeit ceding ground in mobile and search.
With AI, it is too early to draw a conclusion, but Microsoft has indeed made it big.
In a memo to the committee that picked the CEO, Nadella again used the phrase “ambient intelligence and ubiquitous computing”. Later, he simplified it to say: “mobile-first, and cloud later”. “My PR folks came and said, ‘What the heck is this? Nobody will understand this’,” laughed Nadella.
Ten years down the line, Nadella’s once perplexing phrase is now our reality.
Microsoft Still Has Miles to Go
Today, some of Microsoft’s products align with ‘ubiquitous and ambient computing’, notably its AI PCs and Copilot Vision. Qualcomm, AMD, and Intel are going all in with Microsoft to bring AI features to PCs using the Copilot + program.
In this regard, former Intel CEO Pat Gelsinger said, “When I think about the PC market, this is the most exciting moment in 25 years since the arrival of WiFi.” Likewise, Qualcomm CEO Cristiano Amon called it the “most important development” since the Microsoft 95 operating system.
In fact, Microsoft’s recent Phi-4 small language models pack in a lot of power with just 14 billion parameters. AIM spoke to Harkirat Behl, one of the creators of the Phi series of models, who said that once the architecture is released on Hugging Face, developers will be able to quantise it and optimise it to work locally on laptops and PCs.
But Microsoft’s leaps were not devoid of challenges.
For instance, the company began rolling out the preview version of Microsoft Recall after it was halted in June due to privacy loopholes. The feature takes screenshots of your activity and uses AI to help you recall and find content.
However, recent reports suggest that the tool captures screenshots of payment info and personal identification numbers, even when certain filters are enabled.
“If a bad actor has access to your computer and knows your PIN, they could view Recall bypassing the biometric security checks. They don’t even need physical access to the PC.”
“I was able to access the Recall app and view the timeline on a remote computer by using TeamViewer, a popular remote access application,” said Avram Piltch from Tom’s Hardware.
However, AI PCs do seem promising for on-device AI capabilities.
Intel surveyed 6,000 people in European markets, such as Germany, France, and the UK. About 44% believed that AI PCs were a gimmick, and a whopping 86% were “concerned about the privacy and security of their data when using an AI PC”.
During the Copilot + launch event in May, Nadella said that he expects 50 million sales of AI PCs in the next twelve months. However, according to a Gartner report, global PC sales have only declined in the past few months.
“Even with a full lineup of Windows-based AI PCs for both Arm and x86 in the third quarter of 2024, AI PCs did not boost the demand for PCs since buyers have yet to see their clear benefits or business value,” said Mikako Kitagawa, director analyst at Gartner.
Nobody Likes the Friendship Though
Nadella also recalled the time OpanAI CEO Sam Altman sought help for the company with Azure credits. This was after OpenAI went to Google Cloud Platform (GCP), but couldn’t find a solution and eventually came to Microsoft.
It was at this moment that Altman and Co. spoke to Nadella about Transformers and natural language. “You needed some breakthrough – and maybe the way to do it was how we schematise the human brain and what it does through language and reasoning,” he said.
However, the industry and the government don’t seem to be fans of the Microsoft-OpenAI bond. Recently, Alphabet, which owns Google, asked the Federal Trade Commission to end their partnership.
Reports suggest that companies that buy OpenAI’s technology may have to pay an additional cost if they do not use Microsoft’s servers to run it.
Once a founder of OpenAI, Elon Musk, has had a long tussle with the company since his departure. In his lawsuits that claim OpenAI has abandoned its once set ‘not for profit’ mission, he has now dragged Micorosft, accusing them of anti-competitive and monopolistic practices.
Microsoft, on the other hand, has maintained its stance—it will do everything it takes to get OpenAI on top. A few months ago, the former also participated in the $6.6 billion funding for OpenAI.
When OpenAI announced updates to ChatGPT search and how it seamlessly integrates with the iPhone, Nadella may have felt like a proud dad, as OpenAI was achieving what Microsoft could not.
“I’ve been trying to get an Apple search deal for about 10 years, and so when Tim finally did a deal with Sam, I was the most thrilled person,” he said.
Moreover, OpenAI may also remove a clause from its agreement with Microsoft which disables its access to OpenAI’s advanced models when they reach ‘AGI’. It was included to prevent a large corporation like Microsoft from gaining access to powerful AI systems and prevent any misuse through commercial applications.
Removing the clause would further tempt Microsoft to pour capital into OpenAI. But when will OpenAI achieve AGI? Is it going to be after the ongoing ‘12 days of OpenAI’? The world waits in anticipation.
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