Microsoft is reportedly in talks to invest $10 billion in OpenAI, the company that owns ChatGPT, as part of a funding round that values the firm at $29 billion.
The news highlights the growing interest in the artificial intelligence company, whose chatbot has impressed both learners and advanced users with its ability to generate songs, debug code, and answer questions in a human-like manner.
The funding round could also involve other venture firms, and documents sent to prospective investors suggest that the round is targeting a close by the end of 2022.
Microsoft has previously invested $1 billion in OpenAI, which was founded by Elon Musk and Sam Altman.
Microsoft’s cloud services arm also provides the computing power needed by the AI firm. In addition, Microsoft plans to integrate OpenAI’s image-generation software into its search engine Bing and similar plans are underway for ChatGPT as Microsoft looks to take on Google Search.
According to Semafor, Microsoft will also receive 75% of OpenAI’s profits until it recoups its initial investment. After this threshold, Microsoft will have a 49% stake in OpenAI, with other investors taking another 49%, and OpenAI’s nonprofit parent getting 2%.
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. This was confirmed in a Wall Street Journal report.