Microsoft is reportedly in talks to invest $10 billion in OpenAI, the company behind the popular chatbot app ChatGPT, according to Semafor. Other venture firms are also believed to be involved in the deal, which would value OpenAI at $29 billion, including the new investment. The terms of the deal are not yet confirmed and the investment amount and terms could change.
It’s reported that as part of the deal, Microsoft would receive 75% of OpenAI’s profits until it recoups its initial investment, after which it would own 49% of OpenAI, with other investors owning 49% and OpenAI’s parent company owning 2%. The reports suggest that the deal would give Microsoft a significant stake in the development of OpenAI’s technology on Microsoft Cloud which could position it as a leading player in the consumer technology space.
It is surprising to see that Google is not actively pursuing an investment in OpenAI, given that many see ChatGPT as a potential threat to its search business. Keep in mind that Google has a deep investment in the AI space, dating back to its acquisition of DeepMind in 2014. It’s also worth mentioning that the deal is not finalized, and the terms could change or it could fall apart.
