As per the reports by Semafor, Microsoft Corp (MSFT.O) is in talks to invest $10 billion in ChatGPT-owner OpenAI as part of funding that will value the firm at $29 billion.
OpenAI Gets a Funding f 1B $ From Microsoft
Lately, there has been a rising interest in the AI company, whose chatbot has liitle less stunned the world and spazed amateurs and industry experts with its ability to spit out haikus, debug code and answer questions while imitating human speech.
As per the report, the funding could also include other venture firms and documents sent to prospective investors outlining its terms indicated a targeted close by the end of 2022.
In 2019, Microsoft invested $1 billion in OpenAI. OpenAI was found by Elon Musk and Sam Altman. Microsoft’s cloud services arm also provides the computing power needed by the AI firm.
Last year, the company also unveiled its plans to integrate image-generation software from OpenAI into its search engine Bing.
As Microsoft looks to take on market leader Google Search, there are plans underway for ChatGPT.
Microsoft to Get 75% OpenAI’ Profits before Break-Even, 49% Stake after Break-Even
Also, until OpenAI recovers its initial investment, Microsoft will get 75% of OpenAI’s profits, said Semafor. It also said that post the threshold, Microsoft would have a 49% stake in OpenAI, with other investors taking another 49% and OpenAI’s nonprofit parent getting 2%.
Reuters reported last month a recent pitch by OpenAI to investors said the organization expects $200 million in revenue next year and $1 billion by 2024.
OpenAI charges developers licensing its technology about a penny or a little more to generate 20,000 words of text, and about 2 cents to create an image from a written prompt.
It spends about a few cents in computing power every time someone uses its chatbot, Altman recently said in tweet that has raised concerns about OpenAI’s cash burn.
A Wall Street Journal report said last week OpenAI was in talks to sell existing shares at a roughly $29 billion valuation in a tender offer that would attract investment of at least $300 million.
