Microsoft is planning to invest $10 billion in ChatGPT creator Open AI

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Microsoft ChatGPT

Microsoft is reportedly looking forward to investing in OpenAI, the company behind ChatGPT – the artificial intelligence (AI)-powered chatbot currently generating a significant amount of buzz. This potential deal could see OpenAI valued at an impressive $29 billion. 

Microsoft is planning to invest $10 billion into OpenAI and will eventually own a 49% stake in it. OpenAI will give Microsoft 75% of its profits until Microsoft has made its money back from the investment. Other investors will own 49% equity and Open AI will retain 2%. 

OpenAI will be taking a major step forward with an investment of such significance, which is indicative of the growing interest in AI from investors and top businesses. This can generate further growth for OpenAI to progress projects like ChatGPT as well as other Artificial Intelligence-based ventures. 

By joining forces with OpenAI, Microsoft has put itself in a prime position to shape the future of consumer technology. By directly influencing OpenAI’s tools and development strategies, it is poised not only to remain at the forefront of this transformative movement but also to help drive its progress going forward. 

Microsoft stands to gain immeasurably through its dynamic collaboration with OpenAI, as the cutting-edge technology being developed on Microsoft Cloud has vast potential for widespread consumer advancement over the next decade. An added benefit is that this partnership places it ahead of Google in a critical field of modern tech development. 

Microsoft to leverage OpenAI’s ChatGPT 

In 2015, OpenAI was established as a non-profit research organization. Last month, it opened its AI-driven chatbot ChatGPT to the public, which has since become increasingly popular on social media for answering questions with human-like responses ranging from poems and essays to writing codes for applications. 

Microsoft has recently placed emphasis on utilizing OpenAI’s writing technology by incorporating it into their Office software suite; allowing customers of Word, Outlook, and Powerpoint applications access to AI-created content production tools that provide assistance within their projects. Microsoft also recently said about incorporating ChatGPT into its search tool Bing. 

Even though ChatGPT is not yet capable of providing real-time information and is unreliable at times, it can respond to natural language and goes the extra mile in explaining information to the user. This is something Google can’t do at the moment and has led Google management to reportedly declare a “code red”.  

OpenAI is pushing the boundaries of language modeling with the upcoming release of GPT-4 in late 2023. With over 1 trillion parameters, this model promises to bring more accurate and efficient responses through ChatGPT. 

With its initial investment of $1 billion in July 2019, Microsoft has further strengthened its bond with OpenAI. Moreover, OpenAI is leveraging Azure N-Series Virtual Machines since 2016 as an early adopter to fuel their growth potential. Considering this strong relationship and financial backing from Microsoft, Open AI is reportedly projecting revenues of over $200 million for 2023 and even higher at 1 billion dollars come 2024. 

Read next: Microsoft and the London Stock Exchange Group enter into a strategic agreement to develop new products for the financial market

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