Microsoft reportedly in talks to invest Ksh.1.2 trillion in ChatGPT owner OpenAI
Microsoft is in talks to invest
$10 billion (Ksh.1.2 trillion) in ChatGPT-owner OpenAI as part of funding that
will value the firm at $29 billion (Ksh.3.6 trillion), Semafor reported on
Monday, citing people familiar with the matter.
The news underscores rising interest in the
artificial intelligence company, whose chatbot has dazzled amateurs and
industry experts with its ability to spit out haikus, debug code and answer questions while imitating human speech.
The funding could also include other
venture firms and documents sent to prospective investors outlining its terms
indicated a targeted close by the end of 2022, according to the report.
Microsoft declined to comment, while
OpenAI did not immediately respond to Reuters requests for comment.
The software giant had in 2019 invested $1
billion in OpenAI, founded by Elon Musk and Sam Altman. Microsoft's cloud
services arm also provides the computing power needed by the AI firm.
Microsoft last year unveiled plans to
integrate image-generation software from OpenAI into its search engine Bing. A
recent report from the Information said similar plans were underway
for ChatGPT as Microsoft looks to take on market leader Google Search.
According to Semafor, Microsoft will also get
75% of OpenAI's profits until it recoups its initial investment.
After hitting that threshold, Microsoft would
have a 49% stake in OpenAI, with other investors taking another 49% and
OpenAI's nonprofit parent getting 2%, Semafor said.
Reuters reported last month a recent
pitch by OpenAI to investors said the organization expects $200 million in
revenue next year and $1 billion by 2024.
OpenAI charges developers licensing its
technology about a penny or a little more to generate 20,000 words of text, and
about 2 cents to create an image from a written prompt.
It spends about a few cents in computing
power every time someone uses its chatbot, Altman recently said in tweet that
has raised concerns about OpenAI's cash burn.
A Wall Street Journal report said last week OpenAI was in talks to sell existing shares at a roughly $29 billion valuation in a tender offer that would attract investment of at least $300 million.
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