Microsoft Considers $10 Billion Investment in ChatGPT Creator

One million users in less than a week

Microsoft Corp. is in discussions to invest as much as $10 billion in OpenAI, the creator of viral artificial intelligence bot ChatGPT, according to people familiar with its plans. The proposal under consideration calls for the Redmond, Washington-based software giant to put the money in over multiple years, though the final terms may change, the people said, asking not to be named discussing a private matter. The two companies have been discussing the deal for months, they added.

The potential investment would involve other venture firms and could value OpenAI at about $29 billion, citing people familiar with the talks. Documents sent to investors had targeted end-2022 for a deal closing, it added.
ChatGPT has lit up the internet since launching at the end of November, gathering its first million users in less than a week. Its imitation of human conversation sparked speculation about its potential to supplant professional writers and even threaten Google’s core search business. The organization behind it, co-founded by Elon Musk and Silicon Valley investor Sam Altman, makes money by charging developers to license its technology.

https://www.bloomberg.com/

Microsoft’s investment in the developer of ChatGPT may be the smartest $1 billion investment ever made

If ChatGPT realizes its potential, Microsoft may have future-proofed its cloud and browser business forever  

For the past few months, it has looked like Big Tech’s bull run is coming to an end. As interest rates soar, even well-funded tech companies are retreating from risky, expensive moonshots or money-losing projects. But a speculative bet is increasingly looking like excellent value for money: OpenAI just  released AI bot ChatGPT and is in talks to raise $30 billion in capital.

In 2019, Microsoft invested $1 billion in buoyant artificial intelligence research firm OpenAI, co-founded by Y Combinator’s Sam Altman, Elon Musk, and a group of others just over seven years ago. Financial details of the deal weren’t disclosed at the time, but MIT Tech Review reported in 2020 that the $1 billion was split between cash and credit for Azure, Microsoft’s cloud business. In November, OpenAI released an easy-to-use bot, ChatGPT, based on its GPT 3.5 language model trained on Azure. Engineers, academics, entrepreneurs, non-techies, and investors were nearly universal in their hype and praise as ChatGPT proved (up to a point) to be frighteningly intelligent. Even when buggy, ChatGPT is so smart that Google considers the chatbot “Code Red” for its search business.

Now, OpenAI is reportedly in talks to raise more capital at a valuation of nearly $30 billion – up from a current valuation of $20 billion – and is reportedly in talks with the VC led by Peter Thiel -Company Founders Fund. The valuation would be cemented by a takeover bid with the sale of existing shares to investors. The Information reported that the company could integrate ChatGPT with Bing, its struggling Google competitor. The first real threat to Google’s search hegemony in two decades.

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