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Microsoft in talks to invest $10bn in ChatGPT owner

January 10, 2023

Microsoft in talks to invest $10bn in ChatGPT owner
Microsoft Corp (MSFT.O) is in talks to invest $10 billion into OpenAI, the owner of ChatGPT, which will value the San Francisco-based firm at $29 billion, Semafor reported on Monday, citing people familiar with the matter.

The funding includes other venture firms and deal documents were sent to prospective investors in recent weeks, with the aim to close the round by the end of 2022, the report said.

Microsoft declined to comment, while OpenAI did not immediately respond to Reuters’ request for comment.

This follows a Wall Street Journal report that said OpenAI was in talks to sell existing shares at a roughly $29 billion valuation, with venture capital firms such as Thrive Capital and Founders Fund buying shares from existing shareholders.

OpenAI, founded by Tesla Inc (TSLA.O) CEO Elon Musk and investor Sam Altman, made the ChatGPT chatbot available for free public testing on Nov. 30. A chatbot is a software application designed to mimic human-like conversation based on user prompts.

The Semafor report said the funding terms included Microsoft getting 75% of OpenAI’s profits until it recoups its initial investment once OpenAI figures out how to make money on ChatGPT and other products like image creation tool Dall-E.

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