Microsoft in talks to invest $10 billion in ChatGPT owner OpenAI, reports say

The San Francisco-based company has already received $1 billion from Microsoft

A ChatGPT prompt is shown on a device near a public school in Brooklyn, New York. AP
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Microsoft is in talks to invest $10 billion in OpenAI, the owner of ChatGPT, according to reports.

The San Francisco-based company was co-founded by Elon Musk and investor Sam Altman, and has been making headlines in recent months for its new chatbot, ChatGPT, which has both impressed users and led to concerns, particularly in the education sector.

It received $1 billion in funding from Microsoft in 2019.

The funding terms for further investment include Microsoft receiving 75 per cent of OpenAI's profits until it recoups its initial investment. That is expected to happen once OpenAI works out how to make money on ChatGPT and other products like image creation tool Dall-E, Semafor reported.

Microsoft would have a 49 per cent stake in OpenAI, with other investors taking another 49 per cent and OpenAI's non-profit parent getting 2 per cent, the report said.

OpenAI is in talks to sell shares in a tender offering valuing it at about $29 billion, according to The Wall Street Journal.

Venture capital firms Thrive Capital and Founders Fund are in discussions to invest in the deal, which would include the sale of at least $300 million of shares from existing investors such as employees, the WSJ report said.

ChatGPT had more than 1 million users within days after its launch in December.

AI technology allows it to answer questions instantly, and in response to requests, it can create essays, poems and coding.

Schools in New York have already moved to ban it amid plagiarism concerns.

OpenAI officials say they are working on ways to identify text generated by the bot.

“We don’t want ChatGPT to be used for misleading purposes in schools or anywhere else, so we’re already developing mitigations to help anyone identify text generated by that system,” the company said.

Microsoft has not responded to a request for comment from The National.

Updated: January 11, 2023, 10:07 AM
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