According to sources familiar with the situation, Microsoft Corp. (MSFT.O) is in discussions to invest $10 billion in OpenAI, the company that owns ChatGPT, valuing the San Francisco-based company at $29 billion.
Other venture firms also invest, and according to the article, the round is intended to close by the end of 2022 with the circulation of deal documents to potential investors in recent weeks.
OpenAI did not immediately respond to Reuters’ request for a comment, while Microsoft declined.
This comes after a Wall Street Journal story claiming that OpenAI was in discussions to sell its current stock to venture capital firms including Thrive Capital and Founders Fund for an estimated $29 billion valuation.
Elon Musk, CEO of Tesla Inc. (TSLA.O), and investor Sam Altman launched OpenAI, which released the ChatGPT chatbot for free public testing on Nov. 30. We create a chatbot, a piece of software, to replicate human-like dialogue in response to user input.
According to the Semafor study, the funding conditions stipulated that Microsoft would get 75% of OpenAI’s income up until the point at which OpenAI had earned back its initial investment from ChatGPT and other businesses like the image creation tool Dall-E.
The story stated that upon reaching that milestone, Microsoft would own a 49% share in OpenAI, along with another 49% from other investors and 2% from the nonprofit parent of OpenAI, without specifying what the stakes would be until Microsoft received its money back.
The Information revealed this week that Microsoft, which invested $1 billion in OpenAI in 2019, was aiming to develop a version of its search engine Bing utilising the ChatGPT AI.