Microsoft Considers $10 Billion Investment in ChatGPT Creator OpenAI
Microsoft plans a massive $10 billion investment in OpenAI as the ChatGPT creator seeks a $29 billion valuation. The deal gives Microsoft a major stake while the AI chatbot continues to spark both excitement and educational bans.
Microsoft is in negotiations to invest $10 billion into OpenAI, the company behind the widely popular ChatGPT chatbot. This massive potential deal comes after Microsoft previously provided $1 billion in funding to the San Francisco-based artificial intelligence firm back in 2019.
The proposed terms state that Microsoft receives 75 percent of OpenAI's profits until it recoups its initial investment, after which it holds a 49 percent stake in the company. OpenAI is simultaneously pursuing a tender offer that values the business at approximately $29 billion, drawing interest from venture capital firms like Thrive Capital and Founders Fund.
ChatGPT attracts over a million users rapidly due to its ability to instantly generate essays, poems, and code, but it also causes significant controversy in the education sector. Because of plagiarism concerns, schools in New York already ban the tool, prompting OpenAI to develop mitigations that help users identify text generated by its AI system.