The run-of-show had all been carefully curated at Microsoft’s executive briefing center in Redmond, Wash., yesterday—where the tech company revealed the much-anticipated A.I.-powered version of its Bing search engine.
By harnessing OpenAI’s generative A.I. technology and pairing it with a plethora of its own data, Microsoft hopes it will finally have a chance to surpass Google in search. The new Bing, which the company started rolling out to users on a limited basis Tuesday, can recommend a five-day itinerary in Mexico City, compare flat-screen TVs, write source code, compose emails or social media posts, and translate messages into other languages.
“We’re going to reimagine the search engine, the web browser, and new chat experiences,” Yusuf Mehdi, Microsoft’s corporate vice president and consumer chief marketing officer, said during the company’s presentation on Tuesday.
Microsoft executives uniformly stuck to the script in their comments, and carefully avoided discussing details like the financial cost of running the new Bing, or the specific version of GPT technology being used. Even Microsoft CEO Satya Nadella and Mehdi—both sporting navy pullover sweaters as they spoke to the media—seemed to have planned a matching wardrobe in advance.
Not everything went as planned. On Monday, OpenAI CEO Sam Altman tweeted a picture of himself and Microsoft’s Nadella, saying he was “excited for the event tomorrow”— and in so doing, alerting his 1.3 million followers of the launch event ahead of Microsoft’s carefully orchestrated schedule. Altman’s tweet prompted a response from Microsoft’s communications team, informing attendees that, “in light of recent announcements,” they could now talk freely about the upcoming briefing.
The new A.I. version of Bing, which Microsoft demoed to reporters after the keynote presentation, had a few mishaps: When asked about the death toll from the earthquake in Turkey and Syria, Bing cited data from Feb. 8, even though it was only Feb. 7, and Bing’s chatbot also stumbled through an attempt to identify authors on articles, saying it wasn’t clear from the website, even when it was.
All of this is exactly what you might expect to happen when a $2 trillion tech giant joins hands with an eight-year-old startup run by a Silicon Valley hotshot accustomed to giving his presentations in jeans. And it underscores how Microsoft is diverging from its competitors by tying itself so closely—and investing so much cash—in a startup. Microsoft may hold a lot of sway over OpenAI and its future revenues, and it may be its exclusive cloud provider, but it doesn’t have the autonomy to restrict OpenAI from working with other companies that directly compete against its own Microsoft Office or PowerPoint applications. And it sure can’t maintain absolute control of the narrative.
Altman—the only member of OpenAI’s team to present at Microsoft’s headquarters on Tuesday—spoke for just around two minutes, reading some of the same words from a teleprompter that appeared in a Microsoft blog post. But while he kept his comments to a minimum on stage, Altman’s past comments about A.I. are probably not the kinds of things Microsoft’s PR department would endorse: He has openly contemplated the dangers of revenge porn created by open-source image generators, and has said the worst-case scenario for A.I. is “lights-out for all of us.”
It’s a striking contrast to Microsoft’s own A.I. executives, who choose their words carefully when it comes to the potential dangers of A.I. During a panel at the event specifically about “responsible A.I.,” Microsoft’s chief responsible A.I. officer Natasha Crampton said that employees can flag concerns to a “sensitive use” team of researchers, engineers, and policy employees that deals with instances where the A.I. could have a consequential impact on someone’s life (like decisions on health care, education, or finance), could cause physical or psychological harm, or infringe on human rights in some way. But she wouldn’t specify how large that team was, and she wouldn’t go into much more detail on how it operated.
OpenAI’s biggest benefit for Microsoft may come down to speed and urgency—something Nadella emphasized would be critical as the partners bring about the “new paradigm” for search.
“Rapid innovation is going to come,” Nadella said during the briefing. “In fact, that race starts today in terms of what you can expect. And we’re going to move. We’re going to move fast.”
Both Google and Microsoft appear to be dueling for first mover’s advantage—though it’s unclear who will ultimately have it. While OpenAI debuted its own ChatGPT model to the public at the end of last year, Microsoft only began to issue a limited release this week. Its models are initially quite impressive, but it remains to be seen how Google’s rival A.I. chat offering, Bard, will compare—and the exact point in time when both chatbots will become widely available search engine tools.
But the already-rapid pace at which both companies are trying to deploy their A.I. chatbots has some industry skeptics concerned—and raises questions as to whether there has been enough time to thoughtfully consider the gravity of potential safety issues at hand.
As for Nadella, the answer to that is clear.
“When you are talking about A.I., it’s about alignment with human preferences and societal norms,” Nadella said. “And you don’t want to do that in a lab. You have to do that out there in the world.”
See you tomorrow,
Jessica Mathews
Twitter: @jessicakmathews
Email: jessica.mathews@fortune.com
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Jackson Fordyce curated the deals section of today’s newsletter.
VENTURE DEALS
- Jobber, an Edmonton, Canada-based operations management software provider for home service businesses, raised $100 million in Series D funding. General Atlantic led the round and was joined by Summit Partners, Version One Ventures, and Tech Pioneers Fund.
- Atmosphere, an Austin-based streaming TV entertainment company, raised $65 million in Series D funding co-led by Sageview Capital, Valor Equity Partners, and S3 Ventures.
- Garuda Therapeutics, a Cambridge, Mass.-based blood stem cell therapies developer, raised $62 million in Series B funding. Northpond Ventures, OrbiMed Advisors, Cormorant Asset Management, and Aisling Capital co-led the round and were joined by Sectoral Asset Management, Mass General Brigham Ventures, and Alexandria Venture Investments.
- InfluxData, a San Francisco-based time series data platform provider, raised $51 million in Series E funding. Princeville Capital and Citi Ventures co-led the round and were joined by Battery Ventures, Mayfield Fund, Sapphire Ventures, and others.
- Acceldata, a Campbell, Calif.-based data observability platform, raised $50 million in Series C funding. March Capital led the round and was joined by Industry Ventures, Sanabil Investments, and Insight Partners.
- Fabric8Labs, a San Diego-based electrochemical additive manufacturing company, raised $50 million in Series B funding. New Enterprise Associates led the round and was joined by Intel Capital, imec.XPAND, SE Ventures, TDK Ventures, and Lam Capital.
- Ushur, a Santa Clara, Calif.-based customer experience automation platform, raised $50 million in Series C funding. Third Point Ventures led the round and was joined by Iron Pillar, 8VC, Aflac Ventures, and Pentland Ventures.
- Therma, a San Francisco-based cooling intelligence platform, raised $19 million in Series A funding. Zero Infinity Partners led the round and was joined by Deciens Capital, CityRock Venture Partners, Homecoming Capital, Ananta Capital, Kindergarten Ventures, Collaborative Fund, and Govtech Fund.
- Conquest Planning, a Winnipeg, Canada-based financial planning software startup, raised CAD $24 million ($17.87 million) in Series A funding. Fidelity International Strategic Ventures led the round and was joined by Portage Ventures, BNY Mellon, and RBC.
- Liminal, an Emeryville, Calif.-based battery manufacturing intelligence company, raised $17.5 million in Series A2 funding. ArcTern Ventures led the round and was joined by Northvolt, Ecosystem Integrity Fund, Chrysalix Venture Capital, Good Growth Capital, University of Tokyo Edge Capital Partners, Volta Energy Technologies, Impact Science Ventures, and Helios Climate Ventures.
- flox, a New York-based Nix implementation platform, raised $16.5 million in Series A funding led by New Enterprise Associates.
- MindsDB, a London- and San Jose-based applied machine learning platform, raised $16.5 million in Series A funding from Benchmark.
- Moderne, a San Francisco-based software modernization company, raised $15 million in Series A funding. Intel Capital led the round and was joined by True Ventures, Mango Capital, and Allstate Strategic Ventures.
- Riot, a New York-based cybersecurity platform for employee protection, raised $12 million in funding. Base10 led the round and was joined by Y Combinator, Funders Club, Founders Future, and other angels.
- Peggy, a Toronto-based contemporary art marketplace, raised $10.8 million in seed funding. Real Ventures, ZVC, Garage Capital, Portage, Nomad Capital, and other angels invested in the round.
- VFlowTech, a Singapore-based redox flow energy storage solution provider, raised $10 million in Series A funding. Real Tech Holdings led the round and was joined by SEEDS Capital, Wavemaker Partners, Sing Fuels, and other angels.
- Opscura, an Oakland-based industrial control system cybersecurity company, raised $9.4 million in Series A funding. Anzu Partners led the round and was joined by Dreamit and Mundi Ventures.
- Follow, a San Francisco-based investment platform, raised $9 million in funding. Atomic, Uncork Capital, and Vera Equity invested in the round.
- The Ugly Company, a Farmersville, Calif.-based dried fruit snacks producer, raised $9 million in Series A funding. Sun Valley Packing and Value Creation Strategies co-led the round and were joined by Justin Timberlake and Valley Ag Capital Holdings.
- GlossAi, a Tel Aviv-based video generator platform, raised $8 million in seed funding. New Era Capital Partners led the round and was joined by Guidestar Ventures, 97212 Ventures, MindCET Ventures, Ginossar Ventures, Maccabee Ventures, and others.
- Rembrand, a Los Altos, Calif.-based product placement platform, raised $8 million in seed funding led by Greycroft and UTA.VC.
- Lineaje, a Saratoga, Calif.-based software supply chain security management company, raised $7 million in seed funding led by Tenable Ventures.
- Mazepay, an Aarhus, Denmark-based fintech platform, raised €4 million ($4.29 million) in funding. Scale Capital led the round and was joined by Hambro Perks and Outward VC.
- Frond, a San Francisco-based online community builder, raised $3.3 million in pre-seed funding. Cherry Ventures led the round and was joined by Icehouse Ventures, WndrCo, Script Capital, Tiny VC, Remote First Capital, 468 Capital, and others.
- EarlyBird Education, a Boston-based gamified early literacy assessment platform, raised $3 million in funding. MassMutual’s MM Catalyst Fund led the round and was joined by Lobby Capital and Amplify Capital.
- Aiir Innovations, an Amsterdam-based visual inspection platform for aircraft engines, raised €2.1 million in funding ($2.25 million). Borski Fund led the round and was joined by HearstLab Europe and Mainport Innovation Fund.
- Beaming Health, a San Francisco-based occupational therapy platform for people with autism, raised $1.7 million in seed funding. NextGen Venture Partners led the round and was joined by Tau Ventures, Divergent Investments, Designer Fund, and MedMountain Ventures.
PRIVATE EQUITY
- HighGround, backed by Trivest, acquired Expert Water Removal, a Bradenton, Fla.-based property damage restoration company. Financial terms were not disclosed.
- Knox Lane acquired a majority stake in Spectrum Science, a Washington, D.C.-based marketing, communications, and media firm for the life science industries. Financial terms were not disclosed.
- MetLife Investment Management agreed to acquire Raven Capital Management, a New York- and Santa Monica, Calif.-based alternative investment firm. Financial terms were not disclosed.
EXITS
- BioDerm, a Mountaingate Capital portfolio company, acquired Argentum Medical, a Geneva, Ill.-based infection prevention solutions and wound care products provider, from Shore Capital Partners. Financial terms were not disclosed.
OTHER
- Holcim agreed to acquire Duro-Last, a Saginaw, Mich.-based commercial roofing systems company. Financial terms were not disclosed.
- Redwood Services acquired a majority stake in Best Care Home Services, a Memphis-based HVAC and plumbing services company. Financial terms were not disclosed.
- SEON acquired Complytron, a Budapest-based compliance and anti money laundering company. Financial terms were not disclosed.
FUNDS + FUNDS OF FUNDS
- Goldman Sachs, a New York-based investment banking firm, raised $5.2 billion for a private equity fund focused on buying early-stage companies.
PEOPLE
- Base10, a San Francisco-based venture capital firm, hired Caroline Broder as principal and promoted Rexhi Dollaku to general partner. Formerly, Broder was with Crosslink Capital.
- Coatue Management, a New York-based investment firm, hired Ben Schwerin as general partner. Formerly, he was with Snap, according to The Information.
- Edison Partners, a Princeton, N.J.-based growth equity firm, promoted Steve Zieja to principal.
- One Rock Capital Partners, a New York-based private equity firm, hired Lutz Velten as an operating partner. Formerly, he was with Ecolab.
- San Francisco Equity Partners, a San Francisco-based private equity firm, hired Hywel Robinson as principal. Formerly, he was with Paine Schwartz Partners.
- Susquehanna Growth Equity, a Bala Cynwyd, Pa.-based growth equity firm, promoted David Badler to managing director.
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