Microsoft Reportedly Closing In On $10 Billion Investment Into ChatGPT Creator OpenAI

Microsoft Reportedly Closing In On $10 Billion Investment Into ChatGPT Creator OpenAI

Topline

Microsoft and OpenAI, the company behind the viral artificial intelligence chatbot ChatGPT are in discussions for a deal that would value the latter at $29 billion, according to several reports, as the legacy technology giant throws its weight behind the latest viral sensation and encroaches on its longtime rival Google.

Key Facts

Microsoft has discussed making a $10 billion investment into OpenAI, Semafor reported late Monday, citing people with knowledge of the discussions.

The deal, which would eventually net Microsoft a 49% stake in the upstart firm, also includes a clause that Microsoft would receive three-quarters of OpenAI’s profits until it recovers its investment, according to Semafor, with additional investors taking 49% and OpenAI retaining the remaining 2% in equity.

Bloomberg matched Semafor’s reporting late Monday, though in less certain terms, with sources telling Bloomberg that Microsoft has talked about investing as much as $10 billion into OpenAI at a roughly $29 billion valuation.

Microsoft and OpenAI did not immediately respond to Forbes’ requests for comment.

Key Background

OpenAI launched ChatGPT to the public free of charge on November 30, with the program quickly surging in popularity as many users marveled at how well the bot modeled human speech. Microsoft invested $1 billion in OpenAI in 2019, becoming the startup’s exclusive cloud provider. The companies have been in talks for months about Microsoft significantly upping its equity stake in OpenAI, according to Bloomberg. The Wall Street Journal reported last week that OpenAI was closing in on selling shares at a $29 billion valuation.

Tangent

Microsoft reportedly plans to integrate ChatGPT into its Bing search engine, and Google executives are reportedly scrambling as the artificial intelligence sensation threatens to cut into Google’s long-time dominance in the space. Shares of Google parent company Alphabet slipped 2.2% during early Tuesday trading amid a milder selloff, while Microsoft stock gained 0.8%.

Further Reading

Here’s What To Know About OpenAI’s ChatGPT—What It’s Disrupting And How To Use It (Forbes)

ChatGPT Is Coming To A Customer Service Chatbot Near You (Forbes)

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