Why Microsoft thinks ChatGPT (and not the metaverse) is its bright new future

Microsoft is making a big bet on artificial intelligence. The company announced "the third phase" of its relationship with OpenAI -- the creators of ChatGPT and Dall-E 2, among other impressive/concerning AI demos -- which includes "a multiyear, multibillion dollar investment" and the commitment that Microsoft will be the exclusive cloud provider for the AI company. Taken on its own, this is a natural extension of pre-existing financial relationship, but in the context of the last two weeks of brutal tech layoffs -- including major cuts to Microsoft's own augmented and virtual reality teams -- it seems as good a signal as any that Microsoft considers offering AI-enabled services to be a much more viable future than the metaverse. Besides cuts to the company's HoloLens mixed-reality hardware team, Microsoft is also sunsetting at least two VR software efforts. First, AltspaceVR, a social VR platform Microsoft acquired when it started dabbling in mixed-reality experiences in 2017, is shutting down in March.