Microsoft is in talks to invest $10 billion in OpenAI, the company that owns the highly advanced artificial intelligence (AI) chatbot, ChatGPT. The deal would reportedly value OpenAI at $29 billion, and could also include other venture firms, according to Semafor. The investment would be a significant increase from Microsoft’s previous investment of $1 billion in OpenAI in 2019, and would solidify the software giant’s partnership with the AI firm.
This news follows recent reports that Microsoft is looking to integrate OpenAI’s image-generation software into its Bing search engine, and that similar plans are in place for ChatGPT as the company looks to challenge market leader Google Search. If the deal goes through, Microsoft would also reportedly receive 75% of OpenAI’s profits until the initial investment is recouped. Afterwards, Microsoft would have a 49% stake in the company, with other investors holding 49% and OpenAI’s parent organization holding 2%.
According to recent pitches to investors, OpenAI expects to generate $200 million in revenue next year and $1 billion by 2024, primarily through licensing its technology to developers. The company charges about a penny or slightly more for each 20,000 words of text generated and about 2 cents for each image created from a written prompt. The cost of computing power needed to operate the chatbot has raised concerns about OpenAI’s financial viability, but the potential $10 billion investment from Microsoft would go a long way towards addressing those concerns.
It’s worth mentioning that the news is based on unconfirmed sources and the companies have not yet commented on it.
