Microsoft plans to invest USD 10 billion in OpenAI—the firm behind ChatGPT

Microsoft eyes to invest USD 10 billion to OpenAI who rose into popluarity through its own AI tool, ChatGPT.

The investment, including other venture firms would boost the value of OpenAI to USD 29 billion.

The report said it’s still unclear whether the deal has come to a close, but documents sent to potential investors in recent weeks indicated to close the deal by end-2022.

Microsoft’s $10 billion investment in ChatGPT would be part of a complex arrangement that sees the company receive 75% of OpenAI’s profits until it regains the money MS has put in, Semafor reported citing people familiar with the matter.

Though, it is uncertain whether the money OpenAI spends on Microsoft’s cloud-computing service would be taken into account when calculating the threshold.

Microsoft’s stake in OpenAI would reach 49% when that threshold is reached, with other investors taking 49% and OpenAI’s nonprofit parent receiving 2%.

OpenAI could deploy Microsoft’s extensive data to train more advanced AI models. This could enable the development of AI-based products and services such as virtual assistants and robotics.

We can even see a comeback of Clippy empowered by AI or the revival of Cortana, but that’s a mere speculation.

Microsoft last year introduced its new app Designer that integrates AI-generated art — using OpenAI’s text-to-image model DALL-E 2 — with graphic design. As well as incorporating AI with its Edge browser and Bing search engine to make AI-generated art at ease.

According to The Information, Microsoft’s long-term goal is to challenge Google as the market leader. The $10 billion investment in OpenAI would better Microsoft Office applications, providing users with word and phrase suggestions to reduce errors, summarizing lengthy documents and emphasizing crucial points, and creating automated replies for Outlook among others.

Microsoft’s investment is not a risky one, though. OpenAI’s CEO Sam Altman points out that ChatGPT costs a few cents in computing power each time a user interacts with its chatbot. But the majority of the investment will be allocated to Microsoft’s cloud business, which is striving to match the capability of Amazon Web Services, according to Semafor.

Microsoft previously in 2019, has already invested USD 1 billion in OpenAI whose founders are Elon Musk and Altman.