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Microsoft plans to invest $10 billion in ChatGPT parent OpenAI, report says

Microsoft plans to invest $10 billion in ChatGPT parent OpenAI, report says
ChatGPT is an open AI convesrational project of OpenAI.


American multinational tech giant Microsoft is planning to invest $10 billion into OpenAI, the parent of the wildly popular app ChatGPT. The funding will include other firms and will value OpenAI at $29 billion, Semafor reported on Monday.


Although it is still unclear if the deal has been finalized, the report noted that documents were sent to prospective investors in recent weeks outlining its terms and aim to close the deal by the end of 2022. Microsoft would get 75% of OpenAI’s profits until it recoups its investment, after which the tech major would have a 49% stake in OpenAI, the report noted. Other investors will take another 49% and OpenAI’s nonprofit parent will get 2%, it added.


There has been no official confirmation either from Microsoft or OpenAI about the same. In October, The Information reported that OpenAI was in advanced talks with Microsoft for more funding. The tech company headed by Satya Nadella has previously invested $1 billion in OpenAI in 2019.


Just last week, The Wall Street Journal also reported that OpenAI is planning to sell existing shares at a roughly $29 billion valuation. Venture capital firms such as Thrive Capital and Founders Fund were in talks to buy the shares, it added.


Since its release in November last year, ChatGPT has been a center of excitement for many due to its human-like response. It is a “conversational” AI app that answers “followup questions, admit its mistakes, challenge incorrect premises, and reject inappropriate requests.”