First VC investor in ChatGPT parent OpenAI sees a 2-horse AI race as Microsoft and Google eye ‘the most critical technology for the planet’

  • “AI technology is probably the most critical technology for the planet in the next 20 years,” VC investor Vinod Khosla said.
  • While opportunities in AI will be much larger than people expect today, he sees a two-horse race. 
  • Khosla told CNBC that Microsoft’s partner OpenAI is nimble, and Google has a deep pool of resources.

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Opportunities in artificial intelligence will be much larger than people expect, but the market will be a two-horse race, according to venture capitalist Vinod Khosla, who was the first VC investor in ChatGPT parent OpenAI. 

His Khosla Ventures invested in OpenAI in 2019, and the startup has since received billions of dollars from Microsoft, which is integrating its AI technology into Bing.

“AI technology is probably the most critical technology for the planet in the next 20 years,” Khosla told CNBC on Wednesday.

He also noted that the generative AI technology behind so-called chatbots like ChatGPT and Google’s Bard will recast search engines into “answer engines.”

Microsoft and Google have ample room to take advantage of a growing market, and they both bring different spheres of strength to furthering AI research and technology. 

“OpenAI needed the large resources Microsoft had, so it’s been a great partnership. They are a fast, nimble organization [and] that’s their advantage,” Khosla said. “Google has a lot of research talent and they have a lot of good technology also, and I’ve no doubt they’ll get it right.”

Investor excitement over AI has skyrocketed in recent months thanks to the success of ChatGPT, as well as an integration of the chatbot technology with search engine Bing. Google’s Bard earlier this week stumbled when it provided incorrect information in a promo meant to highlight the technology. 

But Deepwater Asset Management’s Gene Munster said Alphabet’s stock drop on Wednesday was overblown, and the company’s artificial intelligence technology shouldn’t be so easily dismissed. 

Similarly, Bank of America said that while Microsoft emerged as the winner this week in AI, Google has several key long-term advantages.

The AI market will dwarf both Google’s and Microsoft’s current markets in 20 years, Kholsa said, adding that the “market is very very large, far larger than most people would project today.”

“Both have really good infrastructure, the resources to compete effectively, and I think this will become a two-horse race in this marketplace,” he said. “One will have nimble OpenAI. The other will have a lot of deep talent.” 

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