Microsoft is reportedly negotiating to invest ten billion dollars (about 82.2 billion rupees) into OpenAI, the proprietor of ChatGPT.
This could potentially give the San Francisco-based company an estimated worth of 29 billion dollars (roughly 238.4 billion rupees), according to Semafor’s Monday report, citing people familiar with the situation.
Documents regarding the venture have been distributed to possible investors in recent weeks with the objective of finalizing the round of funding by the end of 2022, according to the report.
OpenAI
Microsoft declined to give any remarks, while OpenAI did not immediately answer Reuters’ request for a statement.
According to the Wall Street Journal, Open AI is negotiating to offer existing stock at an estimated worth of $29 billion, with venture capital companies like Thrive Capital and Founders Fund obtaining shares from current investors.
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On November 30, OpenAI – an organization co-founded by Elon Musk, the CEO of Tesla, and investor Sam Altman – released ChatGPT, a chatbot, to the public for free testing. Chatbots are software programs designed to simulate natural human conversations in response to input from users.
The Semafor report indicated that until Open AI discovers a profitable approach for ChatGPT and other products such as Dall-E, Microsoft would receive seventy-five percent of OpenAI’s profits until its initial investment is recouped.
Upon reaching the specified limit, OpenAI’s non-profit parent would take a 2 percent stake, while Microsoft and other investors would hold a combined 49 percent stake. The report did not give further details about the stakes until Microsoft has recovered its investment.
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Open AI, which Microsoft invested $1 billion (approximately Rs. 8,221 crore) in last year, is reportedly working on launching a version of its search engine Bing that will be powered by the AI technology behind ChatGPT, according to The Information last week.