Microsoft Corp is in discussions to invest $10 billion in OpenAI, the owner and operator of ChatGPT. This will bring the firm’s value to $29 billion, as reported by Semafor on Monday, citing industry sources familiar with the matter.
According to the report, other venture firms were also involved in the funding. Deal documents were sent out to potential investors in recent weeks with the goal of closing the round by 2022.
Microsoft declined to comment and OpenAI did not immediately respond either.
This is in response to a Wall Street Journal article that stated OpenAI was looking to sell its existing shares at a valuation of approximately $29 billion, with venture capital firms like Thrive Capital or Founders Fund purchasing shares from existing shareholders.
OpenAI was founded by Tesla CEO Elon Musk, and Sam Altman, an investor. The ChatGPT chatbot was made available for public testing free of charge on November 30. Typical chatbots are software applications designed to copy human-like conversations with user prompts, but ChatGPT is able to do much more than that.
According to Semafor, Microsoft was entitled to 75% of OpenAI’s profits. OpenAI will then recoup its initial investment after it has figured out how to make money with ChatGPT and other products such as Dall-E’s image creation tool.