Microsoft (MSFT)’s capital expenditure increased by 80% in the March quarter to $14 billion and is scheduled to increase by more than 50% for the entire year to more than $50 billion. The increased spending stems from growing demand for the company’s AI services. Additionally, the company has to spend billions of dollars to safeguard its edge on artificial intelligence.
Adept Deal
While the company has already invested more than $13 billion in ChatGPT parent OpenAI, it is not showing any signs of slowing down as it continues to lead the AI arms race. Immediate reports indicate that the company has opened talks about the possibility of acquiring AI startup Adept as part of its AI investment spree.
According to people who are knowledgeable about the matter, the software giant has held talks with the startup. It has also emerged that Adept has already received and signed a term sheet agreement from Microsoft. Nevertheless, there are no details about the specifics and financial value of the deal.
It is waiting to be seen if Microsoft will propose a similar deal structure for Adept to the one it used for Inflection, another popular artificial intelligence startup. In the deal, Microsoft hired inflection cofounder and CEO Mustafa Suleyman, the firm’s research scientists and AI engineers. However, it did not formally acquire the startup.
Microsoft ended up paying Inflection investors $650 million to license the right of Inflection technology. A deal with Adept would not surprise as Microsoft already has a commercial agreement with the AI startup.
Founded in 2022 by OpenAI and Google veterans, Adept has become one of the most significant forces in AI innovation. The startup is best known for its research paper, which details a unique neural network architecture on which the most generative AI boom has been created. Adept has carved a niche in the development and use of transformers that can make AI assistants for businesses and one that can automate any workflow using AI.
The milestones Adept has achieved in AI have been the catalyst behind the company raising more than $400 million in funding since last year. The startup was valued at about $1 billion when it raised $350 million in its Series B round last year from investors led by General Catalyst and Spark Capital.
Waabi $200M Raise
Meanwhile, Canada’s self-driving startup Waabi has raised $200 million in a new funding round, and the process promised to launch generative AI-powered driverless trucks next year. Some of the investors that participated in the funding round include Nvidia (NVDA), Volvo Group Scania Invest, and Porsche Automobil.
The $200 million investment underscores investors’ growing interest in startups working on generative artificial intelligence, especially those that can be used in autonomous driving. For Waabi, capital injection marks an essential milestone in the push to solve the complex challenges of self-driving vehicles.
The self-driving startup has made impressive strides in developing a new generative AI model to take sensor data from the surroundings and make predictive decisions. It operates the same way as large language models like ChatGPT. Nevertheless, its technology is built differently from transformers, the generative AI architecture that underpins most large language models.
