Microsoft in talks to invest $10 billion for 49% stake in ChatGPT owner, OpenAI
Unless you’ve been living in a cave, you’ve definitely heard of ChatGPT, the best dialogue-based artificial intelligence chatbot ever released to the general public by OpenAI. However, Microsoft was one of the few companies that saw the potential in OpenAI before it became popular as it is today. In July 2019, Microsoft invested $1 billion in OpenAI as part of the effort for the two companies to work together to bring supercomputing technologies.
Fast forward more than three years later, the tech giant is about to give $10 billion to OpenAI in exchange to own half of the company. Microsoft is in talks to acquire a 49% stake worth $10 billion in ChatGPT owner OpenAI, Semafor reported on Monday, citing people familiar with the matter. The funding includes other venture capital firms and will push the valuation of the San Francisco-based OpenAI to $29 billion, the report said.
As part of the funding agreement, the Semafor report said Microsoft will get “75% of OpenAI’s profits until it recoups its initial investment once OpenAI figures out how to make money on ChatGPT and other products like image creation tool Dall-E.”
“On hitting that threshold, Microsoft would have a 49% stake in OpenAI, with other investors taking another 49% and OpenAI’s nonprofit parent getting 2%,” the report said, without clarifying what the stakes would be until Microsoft got its money back.
On November 30, 2022, OpenAI took the internet by storm after it released its dialogue-based AI chatbot called ChatGPT. The new chatbot-powered AI, which has been hailed as a potential game-changer in the world of AI, is a language model trained by OpenAI to interact with humans in a conversational way. ChatGPT has made text- and image-generation a mainstream hit. We even asked ChatGPT to tell us about itself.
Just five days after its launch, ChatGPT crossed one million users, according to a post by Open AI co-founder Sam Altman. To put that in perspective, it took Netflix 3.5 years, Facebook 10 months, Spotify 5 months, and Instagram 2.5 months to reach the one million users mark.
Since its launch about a month ago, ChatGPT has impressed many experts with its writing ability, proficiency in handling complex tasks, and its ease of use. ChatGPT is currently free to use but Altman said the company will at some point charge people to use the chatbot that many said could one day potentially replace humans.
OpenAI was founded in late 2015 by Elon Musk and Sam Altman as a for-profit startup conducting research in artificial intelligence (AI) with the goal of promoting and developing friendly AI in such a way as to benefit humanity as a whole. OpenIA aims to “freely collaborate” with other institutions and researchers by making its patents and research open to the public. Both founders are motivated in part by concerns about existential risk from artificial general intelligence.