Good morning! This is The Neuron, part of a balanced breakfast. We recommend labneh on toast to go with it!

Today in AI:

• Microsoft and OpenAI Confirm Their Big Deal

• "Photoshop With Words" Comes to Playground

• Around the Horn

• Leo Sends His Regards

Microsoft and OpenAI Confirm Their Big Deal

We all saw it coming.

OpenAI confirmed that Microsoft will be providing a "multi-year, multi-billion dollar investment".

The details appear to be what we heard about a couple weeks ago:

• Microsoft to invest $10 billion in OpenAI

• OpenAI's tech gets embedded everywhere: Bing, Word, Powerpoint, Outlook, Azure

• Microsoft earns back its investment in a super weird way (see link above for more detail)

Just in time for Wall Street. Microsoft was originally slated to announce their earnings yesterday, but this announcement took its place. They're now having their earnings call today, and we expect OpenAI to be all over the script.

"Photoshop With Words" Comes to Playground

Let's take a tour.

One of the links in yesterday's Around the Horn sent you to "InstructPix2Pix", which allowed you to edit images with a command like "wear a suit" or "make him wear VR glasses".

Yesterday, Playground released an update that builds InstructPix2Pix into their product.

It works the same way. Here's Leo in sunglasses:

There's a bigger point. If you wanted to sound smart about AI, a great question to ask is: how do you build something that becomes value?

Everyone's using the same models. InstructPix2Pix is open-source - you could build your own app around it today. If everyone can do it, then how do you become a dominant player?

Playground is an interesting case study to watch. They're trying two strategies:

1. Make Playground a one-stop shop - Instead of going to Midjourney or Stable Diffusion, put all the best models - Stable Diffusion, DALL-E, InstructPix2Pix - and make them easy to use.

2. Make it cool to be good at AI images - Playground lets you follow and like other creations. Is this a new social network in the making? An early sign it's working: users are starting to sign their creations with their name.

Around the Horn

• "Unlimited voice generator" ElevenLabs raises a $2 million pre-seed round.

• Trippy new research turns a video into a 3D scene.

• New research can turn a pile of furniture into a nicely organized room.

• US Congressman Ted Lieu argues for AI regulation (NY Times).

• McKinsey acquires MLOps platform Iguazio for $50 million.

• Promptle: Wordle, but with AI prompts.

DM me links on Twitter: @nonmayorpete

Leo Sends His Regards

That's all we have for today. See you cool cats on Twitter if you're there: @nonmayorpete