Microsoft in talks to invest USD 10 bln in OpenAI

Tuesday 10 January 2023 15:02 CET | News

Microsoft has allegedly been in talks to invest USD 10 billion into OpenAI, the artificial intelligence (AI) research and deployment company that owns ChatGPT.


The funding, which is thought to include additional venture firms, would value the US-based firm at USD 29 billion, together with the new investment. 

As reported by Reuters, deal documents have already been sent to prospective investors, and the belief is that there were terms to indicate a targeted close by the end of 2022, however it is unclear whether the deal has been finalised.

Based on the funding terms, Microsoft would receive 75% of OpenAI's profits until its initial investment is recouped and once OpenAI assesses how to make profits on ChatGPT and other products of the likes of its image creation tool, Dall-E. Should the threshold be reached, its structure would revert so that it would reflect its ownership, meaning that Microsoft would then have a 49% stake in OpenAI, other investors another 49%, and OpenAI’s non-profit parent would get 2%. No clarification was provided on what is expected to happen up until Microsoft would receive back its money. 

Having invested USD 1 billion in OpenAI in 2019, Microsoft was working towards launching a version of its search engine Bing leveraging the AI behind ChatGPT, as stated by Reuters. 

The news of the investment follows a Wall Street Journal announcement earlier in January 2023, which stated that OpenAI was in talks to sell existing shares at a roughly USD 29 billion valuation, with venture capital firms of the likes of Thrive Capital and Founders Fund purchasing shares from existing shareholders.

Microsoft has allegedly been in talks to invest USD 10 billion into OpenAI, the artificial intelligence (AI) research and deployment company that owns ChatGPT.

ChatGPT chatbot capabilities and risks

A software application that is designed to mimic human-like conversation based on user prompts, ChatGPT chatbot was made available for free public testing by OpenAI on 30 November 2022. 

Following its original point of launch, ChatGPT penetrated all verticals and blew up in popularity, and there is an expectation that AI might get to a point where it is integrated within daily workflows.

ChatGPT was created to assist in a wide range of use cases, including code development and debugging. From a user perspective, one of its main attractions is that it allows interaction with the chatbot in a conversational manner and provides assistance on everything ranging from writing software to understanding complex topics, writing essays and emails, improving customer service, and testing business or market scenarios.

Despite its potential, there are also drawbacks to it and ChatGPT can be used for fraud. Researchers at Check Point Research (CPR) have already reported instances where cybercriminals leveraged the technology for writing malware and carrying out other malicious activities such the creation of an automated Dark Web marketplace for trading stolen bank account and payment card data, malware tools, drugs, ammunition, and other illicit goods.

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Keywords: investment, artificial intelligence, Microsoft, funding, ChatGPT, fintech
Categories: Banking & Fintech
Companies: Microsoft, OpenAI
Countries: World
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Banking & Fintech




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