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Microsoft plans $10 billion investment in ChatGPT owner OpenAI
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IntroductionBy Ambar Warrick -- U.S. technology giant (NASDAQ:) is in talks to invest up to $10 billion in arti ...
By Ambar Warrick
-- U.S. technology giant (NASDAQ:) is Pai Mall Barterin talks to invest up to $10 billion in artificial intelligence firm OpenAI, the firm behind the wildly popular platform ChatGPT, news outlet Semafor reported on Tuesday.
The funding will also include other venture capital firms, and will value OpenAI at about $29 billion, Semafor reported. The funding is expected to be part of a “complicated deal” in which Microsoft will gain about 75% of OpenAI’s profits until the firm recoups the initial investment.
After recoupment, Microsoft will hold about 49% of OpenAI, while other investors will take a remaining 49% stake and OpenAI’s nonprofit parent will hold a 2% stake. But it is unclear if the deal has been finalized.
The report comes amid speculation that Microsoft is planning to incorporate OpenAI’s technology into its Office and email software. Microsoft had reportedly invested about $1 billion in cash and cloud credits into OpenAI in 2019, and was in talks to increase its stake in the firm.
OpenAI surged in popularity in recent months after the firm unveiled its ChatGPT platform- a chatbot that is capable of generating detailed and articulated responses following simple inputs. The release of the chatbot spurred widespread speculation over how the nature of writing could change in the coming years, especially as the technology is finetuned.
But in the interim, ChatGPT is reportedly extremely expensive to operate. OpenAI founder Sam Altman recently said that the bot costs the company a few cents every time it is used to generate text.
Still, artificial intelligence is expected to be a disruptive force for businesses in the coming years. OpenAI's image generating tool, DALL-E, also garnered both praise and controversy for being able to create high-quality digital images from simple prompts.
Microsoft and OpenAI could not be immediately reached for comment outside of business hours.
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