Microsoft Corporation is in talks to acquire a 49 percent stake worth $10 billion in ChatGPT owner OpenAI, Fortune magazine said this quoting people familiar with the matter.
Microsoft would receive 75 per cent of OpenAI’s income until it has recovered its initial investment. Once they hit that threshold, they would have a 49 per cent stake in OpenAI, with other investors taking another 49 per cent and OpenAI’s nonprofit parent getting 2 percent.
OpenAI is currently raising funds at a $29 billion valuation and is allowing employees along with early investors to sell their shares at that valuation. Microsoft has already invested $1 billion into the company in 2019.
Microsoft will look to add OpenAI’s Chatbot, ChatGPT’s Artificial Intelligence tech to Bing, Word, Outlook, Excel and PowerPoint. MS office has 1.4 billion users worldwide.
ChatGPT has lit up the internet since launching at the end of November 2022, 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.
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The organization behind it, co-founded by Elon Musk and Silicon Valley investor Sam Altman, makes money by charging developers to license its technology.
The new technology is built on OpenAI’s GPT-3 language model and comes at the end of a year of headline-grabbing advances in AI. The company’s Dall-E image-generating model — which accepts written prompts to synthesize art and other images — also gave rise to a broad debate about the infusion of AI into creative industries. OpenAI is already working on a successor GPT-4 model for its natural language processing.
Microsoft has previously invested about $1 billion in OpenAI. It’s also working to add ChatGPT to its Bing search engine, seeking an edge on Alphabet Inc.’s dominant search offering. The bot is capable of responding to queries in a natural and humanlike manner, carrying on a conversation and answering follow-up questions, unlike the basic set of links that a Google search provides.
Still, concern about its accuracy — which Altman himself has said is not good enough for the bot to be relied on — has prompted caution about its premature use, and New York City schools have banned its students from accessing ChatGPT.