Microsoft Looks to Invest $10 Billion in “OpenAI”

Microsoft Corp is in negotiations with OpenAI, the owner of ChatGPT, with an investment value of $10 billion.

The funding with other venture firms, while the deal documents were sent to prospective investors not long ago with an intention to close the deal by the end of 2022.

Earlier, Wall Street Journal reported that OpenAI was in talks for negotiations on selling existing shares valued at nearly $29 billion with venture firms like Trive Capital.

OpenAI was founded by Tesla’s Elon Musk and Sam Altman. The firm created the ChatGPT chatbot; it was the software application that mimicked human conversations and made them freely available on November 30 based on user prompts.

The funding terms include Microsoft getting OpenAI’s profit by 75% until it recoups the initial investment once it finds out how to generate revenue from ChatGPT and Dall-E, Semafor reported.

Microsoft will get 49% shares in order to reach the desired profit threshold and other investments get 49%. The last 2% is for nonprofit parents of OpenAI.

Microsoft once invested $1 billion in OpenAI in 2019. The company is now working to launch its own search engine Bing by using AI behind ChatGPT, according to people close to the matter and reported by The Information.