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Microsoft is in talks to invest $10 billion in OpenAI, the owner of ChatGPT

Artificial Intelligence

Microsoft is in talks to invest $10 billion in OpenAI, the owner of ChatGPT

People with knowledge of the situation claim that Microsoft Corp. is in discussions to invest $10 billion in OpenAI, the company that owns ChatGPT, valuing the San Francisco-based business at $29 billion.

Other venture firms have contributed to the funding, and deal documents have been distributed to prospective investors in recent weeks, with the goal of closing the round by the end of 2022, according to the report.

This comes after a Wall Street Journal report claiming that OpenAI was in discussions to sell its existing stock to venture capital firms like Thrive Capital and Founders Fund for an estimated $29 billion valuation.

Elon Musk, CEO of Tesla Inc., and investor Sam Altman founded OpenAI, which released the ChatGPT chatbot for free public testing on November 30, 2022. A chatbot is a piece of software created to mimic human-like conversation in response to user input.

According to the report, the funding terms include Microsoft receiving 75% of OpenAI's profits until it recoups its initial investment once OpenAI figures out how to make money on ChatGPT and other products such as the image creation tool Dall-E.

Microsoft, which invested $1 billion in OpenAI in 2019, is working on a version of its search engine Bing that will use the ChatGPT AI.

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