Microsoft in talks to invest $10bn in ChatGPT owner

Microsoft in talks to invest $10bn in ChatGPT owner

People walks in front of a screen at the World Internet Conference (WIC) in Wuzhen, Zhejiang province, China, on Oct 20, 2019. (Photo: Reuters)
People walks in front of a screen at the World Internet Conference (WIC) in Wuzhen, Zhejiang province, China, on Oct 20, 2019. (Photo: Reuters)

BENGALURU: Microsoft Corp is in talks to invest US$10 billion into OpenAI, the owner of ChatGPT, which will value the San Francisco-based firm at $29 billion, Semafor reported on Monday, citing people familiar with the matter.

The funding includes other venture firms and deal documents were sent to prospective investors in recent weeks, with the aim to close the round by the end of 2022, the report said.

Microsoft declined to comment, while OpenAI did not immediately respond to Reuters' request for comment.

This follows a Wall Street Journal report that said OpenAI was in talks to sell existing shares at a roughly $29 billion valuation, with venture capital firms such as Thrive Capital and Founders Fund buying shares from existing shareholders.

OpenAI, founded by Tesla Inc CEO Elon Musk and investor Sam Altman, made the ChatGPT chatbot available for free public testing on Nov 30 last year. A chatbot is a software application designed to mimic human-like conversation based on user prompts.

The Semafor report said the funding terms included Microsoft getting 75% of OpenAI's profits until it recoups its initial investment once OpenAI figures out how to make money on ChatGPT and other products like image creation tool Dall-E.

On hitting that threshold, Microsoft would have a 49% stake in OpenAI, with other investors taking another 49% and OpenAI's nonprofit parent getting 2%, the report said, without clarifying what the stakes would be until Microsoft got its money back.

Microsoft, which invested $1 billion in OpenAI in 2019, was working to launch a version of its search engine Bing using the AI behind ChatGPT, the Information reported last week. 


Do you like the content of this article?
COMMENT (13)

CPN invests B1bn in huge sales campaign

Central Pattana Plc (CPN) is partnering with firms under the Central Group umbrella as well as its leading business partners by investing more than 1 billion baht in a mid-year sales campaign dubbed "The Greatest Grand Sale 2023".

08:03

Ministry maintains export target despite stagnation

The Commerce Ministry is keeping its export growth target of 1-2% this year despite Thai shipments falling for a seventh consecutive month in April.

07:20

Bottoms up to clarity on alcohol laws

The two main parties trying to form a government seek reform to open up local beer and liquor production.

06:34