Microsoft in talks to invest $10 billion in ChatGPT owner: Report

Windows maker Microsoft is in talks to invest $10 billion into OpenAI, the owner of ChatGPT, which will value the San Francisco-based firm at $29 billion, Semafor reported on Monday.

The $10 billion investment would also include other venture firms, which would value OpenAI, the firm behind ChatGPT, at $29 billion, including the new investment, the people said. It’s unclear if the deal has been finalized but documents sent to prospective investors in recent weeks outlining its terms indicated a targeted close by the end of 2022, the report added.

After the deal, Microsoft would get 75% of OpenAI’s profits until it recoups the investment. Post that threshold is reached, it would revert to a structure that reflects ownership of OpenAI, with Microsoft having a 49% stake, other investors taking another 49% and OpenAI’s nonprofit parent getting 2%. There’s also a profit cap that varies for each set of investors — unusual for venture deals, which investors hope might return 20 or 30 times their money, the report added citing people familiar with the matter.

This comes a week after it was reported that ChatGPT was allowing employees and early investors to sell their shares at a valuation of $29 billion.

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.

Read: Microsoft planning to bring ChatGPT capabilities to Bing to challenge Google Search

In his visit to India, Microsoft CEO Satya Nadella discussed the future of Cloud and artificial intelligence (AI) at Microsoft Future Ready Leadership Summit.

Nadella did a live demonstration of ChatGPT onstage. The artificial intelligence-fuelled chat robot, ChatGPT became a viral sensation as it could give human-like responses to any question.

Watch: ChatGPT: The Elon Musk-Founded AI Chatbot Explained