A potential $10 billion investment by Microsoft in OpenAI would strengthen the tech giant’s partnership with the ChatGPT maker as it envisions new integrations leveraging breakthroughs from the AI powerhouse.
The potential deal, which is currently the subject of negotiations between the companies, would value OpenAI at $29 billion with the possibility of Microsoft receiving 75% of OpenAI’s profits until it recoups its investment a report Monday from Semaforciting unnamed sources.
Microsoft, which previously invested $1 billion in OpenAI in 2019, would end up getting a 49 percent stake in the San Francisco-based company, Semafor reported. Other investors would also participate in the new financing round.
Bloomberg News confirmed the negotiations, also citing anonymous sources. The news service reported that the current plan calls for Microsoft to make the investment over several years, but noted that the terms are not final.
The news comes as Microsoft is reportedly trying to integrate OpenAI technologies into more of its products, including Microsoft Word, PowerPoint and Outlook a January 7 report by The Information. The site previously reported that Microsoft is is attempting to integrate OpenAI’s ChatGPT with its Bing search engine.
The emergence of ChatGPT has garnered a lot of attention in recent weeks, highlighting the benefits and risks of generative artificial intelligence. The technology provides sophisticated responses and responses to complex and sometimes esoteric user input, although its accuracy has also been questioned in some situations.
OpenAI has benefited from Microsoft computing resources and cloud technology to train its AI models, including an Azure supercomputer announced in 2020 for OpenAI’s exclusive use.
Existing integrations of OpenAI technology in Microsoft products include: the GitHub Copilot featurewhich provides software developers with a virtual AI programmer to suggest code and features as they write programs.
Microsoft could eventually use a similar approach for professionals in finance, retail or other industries, said journalist Mary Jo Foley, editor-in-chief at DirectionsOnMicrosoft.comspeaks on the GeekWire Podcast.
“Microsoft said that this type of technology could be used in any industry,” she said. “It’s not just for programming.”
Microsoft reported a balance of more than $107 billion in cash and short-term investments as of September 30. The company’s proposed $68.7 billion acquisition of Activision-Blizzard would be a cash deal if Microsoft were able to overcome FTC resistance to complete its purchase of the gaming giant later this year.
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