Microsoft (MSFT, Financial) spends a record $13 billion on artificial intelligence (AI), and Wall Street, including JP Morgan, has hailed it as possibly one of the best investments ever made. Microsoft’s focus on AI is paying off, as the company has partnered with OpenAI and is at the vanguard of the nascent AI era.

Five years ago, a young startup was barely noticed, but now it has become a megacorporation after Microsoft bet on it, investing $1 billion in the company that created ChatGPT. While companies such as Microsoft initially started doubting the relevance of generative AI technology with co-founder Bill Gates (Trades, Portfolio), they saw its potential. Flash forward to today, and the company has essentially doubled with a $13 billion pledge, which grants OpenAI priority cloud-computing access rights through its Azure platform.

The benefits have been reaped early as Microsoft harnesses OpenAI’s GPT in its products and services. Microsoft 365 Copilot, an AI assistant, has been applied in as many as 70% of the devices of Fortune 500 companies. This has escalated the demand for Microsoft products and established Microsoft again in the advanced AI market.

Critics said that although capital spending has swelled to reduce profits in the short term, the benefits could be massive in the end. As AI is expected to sustain its explosive growth in the future, the early stake that has been placed on the technology may be the making of an industry giant for the coming years.