- Microsoft is in talks to invest around $10 billion in OpenAI, the startup behind the ChatGPT chatbot, according to Semafor.
- The investment would value OpenAI at $29 billion. It is now valued at around $20 billion.
- Microsoft has already invested $1 billion in OpenAI in 2019.
Tech giant Microsoft is in talks to invest around $10 billion in OpenAI, the owner of popular chatbot ChatGPT, according to a Semafor report on Tuesday, citing people familiar with the matter.
The investment would value OpenAI at around $29 billion, Semafor’s Liz Hoffman and Reed Albergotti reported. It is now valued at around $20 billion.
The deal was expected to close by the end of 2022, but it is not yet clear whether it has been finalized, Semafor reported, citing documents sent to potential investors.
The Wall Street Journal reported last Thursday that OpenAI was in talks to sell existing shares of the company in a takeover bid that would value the company at $29 billion. Venture capital firms, including Thrive Capital and Founders Funds, were in talks to invest at least $300 million in the stock sale, according to the Journal.
As part of the current deal Microsoft is negotiating, it is offering to get 75% of OpenAI’s profits until it recoups its investment, after which Microsoft is aiming for a 49% stake in the company. , depending on the medium. Other investors are expected to own an additional 49% of the company, while OpenAI’s nonprofit parent company would own the remaining stake, according to Semafor.
Microsoft told Insider that it “does not comment
It wouldn’t be the first time that Microsoft has considered an investment in OpenAI. The tech titan has already invested $1 billion in OpenAI in 2019. The Information reported in October that Microsoft was looking to increase its investment in the startup.
OpenAI, an artificial intelligence research lab, was co-founded by Y Combinator alum Sam Altman, Tesla, SpaceX and now Twitter CEO Elon Musk and others in 2015.
—Sam Altman (@sama) January 4, 2023
He’s been making waves recently with ChatGPT, a platform launched in November, because it’s capable of generating human-like written text. ChatGPT got so hot that Google management even issued a “code red” on the potential rival, The New York Times reported in December.
Insider journalist Beatrice Nolan tested the platform and asked ChatGPT to help her write cover letters for real jobs – and recruiters told her they sounded good enough for her. they follow up.