Microsoft set to invest $10 billion in OpenAI, valuing the ChatGPT software firm at $29 billion: Report
Microsoft
Microsoft Corp is in discussions to invest $10 billion in the company that owns ChatGPT, OpenAI, valuing the San Francisco-based firm at $29 billion, according to Reuters quoting a Semafor report.
The funding conditions stipulated that Microsoft would get 75 per cent of OpenAI's income up until the point at which OpenAI had earned back its initial investment from ChatGPT and other businesses like the image creation tool Dall-E, a Semafor report showed, according to Reuters.
Once OpenAI reached that milestone, Microsoft would own a 49 per cent share in the company, followed by 49 per cent from other investors and 2 per cent to OpenAI's nonprofit parent.
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However, the exact stakes wouldn't be known until Microsoft received its money back, said the report.
The latest news comes after investment from other venture firms. In recent weeks, deal documents were circulated to potential investors to close the funding round by the end of 2022, said Reuters referring to the Semafor article.
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Indeed, the latest Microsoft news comes after a Wall Street Journal story showed that OpenAI was discussing selling its current stock to venture capital firms, including Thrive Capital and Founders Fund, for an estimated $29 billion valuation.
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Elon Musk, the CEO of Tesla Inc., and investor Sam Altman launched OpenAI, which released the ChatGPT chatbot for free public testing on November 30. Since then, the text-based artificial intelligence chatbot platform in November, ChatGPT, has been widely popular.
A chatbot is software created to replicate human-like dialogue in response to user input.
According to media reports, analysts are speculating whether AI chatbots will challenge Google's hegemony one day. Some Google employees reportedly wonder if they lost a chance given the company's long history of boasting about its AI competence.
Reuters reported that OpenAI did not immediately respond to the request for comment, while Microsoft declined to do so.
(With inputs from agencies)
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