Microsoft is in talks for a $10 billion investment in ChatGPT owner OpenAI that would value the firm at $29 billion, Semaphore reported on Monday, citing people familiar with the matter. What did
The news marks growing interest in the artificial intelligence company, whose chatbot has wowed hobbyists and industry experts with its ability to mimic human speech for hacks, debug code and answer questions.
The funding may also include documents sent to other venture firms and potential investors outlining its terms indicating a target closing by the end of 2022, according to the report.
Microsoft declined to comment, while OpenAI did not immediately respond to JEE News’ requests for comment.
The software giant invested $1 billion in OpenAI in 2019, which was founded by Elon Musk and Sam Altman. Microsoft’s cloud services arm also provides the computing power needed by the AI firm.
Microsoft last year unveiled plans to integrate image generation software from OpenAI into its search engine Bing. A recent report by Info says that similar plans are underway for ChatGPT as Microsoft looks to compete with market leader Google Search.
According to Semaphore, Microsoft will also receive 75% of OpenAI’s profits until it recoups its initial investment.
Once that threshold is reached, Microsoft will own a 49% stake in OpenAI, other investors will take another 49% and OpenAI’s nonprofit parent will get 2%, Semaphore said.
JEE News reported last month on a recent pitch from OpenAI to investors that said the organization expected revenue of $200 million next year and $1 billion by 2024.
OpenAI charges developers who license its technology a penny or so to generate 20,000 words of text, and about 2 cents to generate an image from a written prompt.
It spends about a few cents in computing power every time someone uses its chatbot, Altman said in a recent tweet, raising concerns about OpenAI’s cash burn.
What’s the average cost per chat?
— Elon Musk (@elonmusk) December 5, 2022
A Wall Street Journal report said last week that OpenAI is in talks to sell existing shares for about $29 billion in a tender offer that would attract at least $300 million in investment. will do
