Categories
Audio Sources - Full Text Articles

Microsoft is reportedly in talks to pump in $10 billion into OpenAI — the owner of ChatGPT — valuing the company at $29 billion

Listen to this article
An image of a phone with ChatGPT and OpenAI's logo visible.Startup OpenAI’s ChatGPT chatbot has been making waves since its November 2022 launch.

NurPhoto/Getty Images

  • Microsoft is in talks to invest about $10 billion into OpenAI, the startup behind the ChatGPT chatbot, per Semafor.
  • The investment would value OpenAI at $29 billion. It’s now valued at about $20 billion.
  • Microsoft already invested $1 billion into OpenAI in 2019.

Tech giant Microsoft is in talks to invest about $10 billion into OpenAI, the owner of the popular ChatGPT chatbot, per a Semafor report on Tuesday, which cited people familiar with the matter.

The investment would value OpenAI at about $29 billion, Semafor’s Liz Hoffman and Reed Albergotti reported. It’s now valued at about $20 billion.

The deal was targeted to close by the end of 2022, but it isn’t clear if it has been finalized yet, Semafor reported, citing documents sent to prospective investors.

The Wall Street Journal reported last Thursday that OpenAI was in talks to sell existing shares of the company in a tender offer that would value the firm at $29 billion. Venture capital firms including Thrive Capital and Founders Funds were in talks to invest at least $300 million in the share sales, according to the Journal.

As part of the current deal Microsoft is negotiating, it’s proposing to get 75% of OpenAI’s profits until it gets it recovers its investment, after which Microsoft’s aims to get 49% stake in the company, per the media outlet. Other investors are expected to own another 49% of the company, while OpenAI’s nonprofit parent would hold the remaining stake, per Semafor. 

Microsoft told Insider it “does not comment on speculation.” OpenAI did not immediately respond to Insider’s request for comment sent outside regular business hours.

This would not be the first time Microsoft’s looking at an investment into OpenAI. The tech titan has already invested $1 billion into OpenAI in 2019. The Information reported in October that Microsoft was looking to increase its investment in the startup. 

OpenAI, an artificial intelligence research lab, was cofounded by Y Combinator alum Sam Altman, Tesla, SpaceX and now Twitter CEO Elon Musk, and others in 2015. 

—Sam Altman (@sama) January 4, 2023

 

It has been making waves recently with ChatGPT, a platform launched in November, as it’s able to generate written human-like text. ChatGPT has been so hot Google’s management has even issued a “code red” over the potential rival, the  The New York Times reported in December.

Insider reporter Beatrice Nolan tested out the platform and asked ChatGPT to help her write cover letters for real jobs — and recruiters told her they looked good enough for them to follow up.

Read the original article on Business Insider