Microsoft is reportedly in talks to invest $10-billion into OpenAI, the owner of ChatGPT, which will value the San Francisco-based firm at $29-billion.
talks to invest US$10-billion into OpenAI, the owner of ChatGPT, which will value the San Francisco-based firm at $29-billion, SemaforThe 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.OpenAI was founded by Tesla CEO Elon Musk and investor Sam Altman
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 CEO Elon Musk and investor Sam Altman, made the ChatGPT chatbot available for free public testing on 30 November. 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. —
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