New York, Jan. 10 (BNA): Microsoft is in talks to invest $10 billion in ChatGPT owner OpenAI, which would value the San Francisco-based company at $29 billion, Semaphore said Monday, citing people familiar with the matter. Thing.
The financing includes other investment firms and deal documents have been sent to potential investors in recent weeks, with the goal of closing the round by the end of 2022, Reuters reported.
It followed a Wall Street Journal report that said OpenAI was in talks to sell existing shares at a valuation of nearly $29 billion, with venture capital firms such as Thrive Capital and Founders Fund buying shares from existing shareholders.
OpenAI, founded by Tesla Inc CEO Elon Musk and investor Sam Altman, has made its ChatGPT chatbot available for free public testing on November 30. A chatbot is a software application designed to mimic a human-like conversation based on user prompts.
Terms of the funding include Microsoft taking 75% of OpenAI’s profits, the Semaphore report said, until it recoups its initial investment once OpenAI figures out how to make money on ChatGPT and other products like the Dall-E image builder.
When that limit is reached, Microsoft will have a 49% stake in OpenAI, with other investors taking another 49% and nonprofit parent company OpenAI getting 2%, the report said, without elaborating what the stakes will be until Microsoft gets its money back.
The Information reported last week that Microsoft, which invested $1 billion in OpenAI in 2019, was working on launching a version of its Bing search engine using the artificial intelligence behind ChatGPT.
MI