News & Analysis

Microsoft Gets a Web3 Boost

The tech giant has several fingers in the AI pie and the latest deal with Aptos Labs allows AI models to be trained using blockchain data

Ever since artificial intelligence  re-captured the minds and wallets of big tech companies post the arrival of generative AI, there’s been a mad rush to capture more. The latest on this front is that Microsoft is partnering with a blockchain company Aptos Labs to expand its work on AI and the shift from Web2 to Web3 experiences. 

The partnership will use Microsoft’s Azure OpenAI Service to help bring Web3 into the mainstream, says a statement from Aptos Labs, a California-based company that claims to create better network tooling and seamless usability to bring the benefits of decentralization to the masses. Simply put, the partnership seeks to drive Web3 adoption! 

In a press release Aptos says, “Onboarding new users to Web3 can be time-consuming and complex, which may deter people from exploring the ecosystem. “There’s a common perception gap between the utility of blockchain and user skepticism around how simple it is to use.” Of course, a crucial challenge revolves around creating wallets on Web3 and changing fiat currency to cryptocurrency, something that governments aren’t too keen about. 

For starters, Aptos Labs proposes to roll out its Aptos Assistant, described in the release as “a responsible, user-friendly and secure assistant” for bridging Web2 to Web3 for everyday internet users as well as enterprises. It says the toll will assist in onboarding to Web3 through AI-based responses that use natural language models. In addition, developers could get guidance on building smart contracts and decentralized apps and push them towards relevant resources. 

The release quoted Aptos Labs CEO Mo Shaikh to suggest that AI and blockchain tech are converging for an important reason that they’re generational breakthroughs that impact the evolution of the internet and shape society. The partnership, in his view, would ensure that this technology becomes accessible to more people and organizations. 

A part of Microsoft’s battle for AI supremacy?

That the big battle for supremacy is being fought between Microsoft and Google is obvious. It’s been less than one full year since GenAI arrived, but there’s already a battle royale being fought out there to corner the biggest share of the hype – yes, you read it right. All the brouhaha is still to fructify into tangible outcomes for enterprises and individuals. 

But words like winner, loser and upstart have already been ascribed to big tech companies with Google and Microsoft battling for the first two slots. Both have seen market caps and valuations soar in the period with every earnings call adding some more to the buzz. Microsoft CFO’s claim that growth from AI services will be gradual and linked to growth of Azure AI and Copilot were matched by Sundar Pichai who simply said Google knows how to integrate AI into its products. 

And the only way these giants can capture anything beyond one’s imagination is to throw their respective weights around building infrastructure as AI ops now need more data storage and memory. Microsoft’s Azure cloud revenues grew 21% as of end-June while Alphabet reported a 28% spike from its cloud business, albeit on a lower base. 

What does the partnership entail?

Coming to the latest partnership, Microsoft is hoping that its AI models can be trained using Aptos’ verified blockchain information. Shaikh told TechCrunch that Aptos will also run validator nodes for its blockchain on the Azure cloud, which can help Microsoft boast about greater reliability and security on its services. 

Microsoft is also seeing the partnership push the envelope for transparency in decentralized systems. The TechCrunch article quotes Daniel An, global director of BD for AI and Web3 at Microsoft as saying that only transparency, trust and verification capabilities of AI generated content would help its increased adoption. 

“For example, how do we know that LLM-generated outputs are authentic [and] trustworthy? How do we know that the training data is bias free in the first place? Blockchain-based solutions can help with verifying, time-stamping and attributing content to its source, thereby improving credibility in a distributed digital economy,” the report said. 

Will it finally bring Web3 into the public domain?

Shaikh too harps on responsible evolution of AI and Web3 through increased credibility. Which is where Aptos’ verification can help train the AI models that allows users to trust information that they consume. Given the challenges that OpenAI, in which Microsoft has a $10 billion stake, has had with ChatGPT4, the company’s interest in credibility is self-explanatory. 

Moreover, if enterprises are to shift over to Web3 tech through a deeper AI connection, they need to adopt blockchain. Developers today balk at Web3 because it is still pretty tough to write safe and secure smart contracts as it’s hardly super intuitive. This is where Microsoft is hoping to make the difference through its Aptos association. 

And Shaikh nails it by stating that applications like GitHub Copilot integration and the Aptos Assistant can help non-Web3 companies access smart contracts and other decentralized tech. The coming together of a system that supports blockchain-chain based contract development and an AI chatbot that bridges Web2 and Web3 can be seen as the need of the hour. 

An hour where Microsoft is only exploring financial services solutions where users can bring asset tokenization, payments, central bank digital currencies and other such options to the market. Who’s to say more use cases aren’t in the pipeline?

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