Microsoft Will Invest $10 Billion in ChatGPT Creator OpenAI

With its collaboration with OpenAI, the tech giant intends to remain at the forefront of generative artificial intelligence.
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Microsoft announced a “multiyear, multibillion-dollar” investment in OpenAI, the San Francisco artificial intelligence lab behind the experimental online chatbot ChatGPT, on Monday.

The financial terms of the deal were not disclosed, but a person familiar with the matter said Microsoft would invest $10 billion in OpenAI- according to The New York Times report.

Microsoft had already invested more than $3 billion in OpenAI, and the new agreement demonstrates the importance of OpenAI’s technology to Microsoft’s future and competition with other large tech companies such as Google, Meta, and Apple.

The companies hope to remain at the forefront of generative artificial intelligence — technologies that can generate text, images, and other media in response to short prompts — with Microsoft’s deep pockets and OpenAI’s cutting-edge artificial intelligence. ChatGPT, a chatbot that answers questions in clear, well-punctuated prose, became the symbol of a new and more powerful wave of A.I. after its surprise release at the end of November.

The agreement comes on the heels of Microsoft’s announcement last week that it had begun laying off employees as part of a 10,000-position reduction effort. The changes, which included severance pay, lease terminations, and “changes to our hardware portfolio,” were estimated to cost $1.2 billion.

The Wall Street Journal reported earlier this month that the startup could be valued at $29 billion as a result of a new tender offer.

Thrive Capital and Founders Fund were said to be in talks to invest in the offer, which would have allowed them to purchase shares from existing OpenAI shareholders.

During a tender offer in 2021, OpenAI was valued at $14 billion.

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