Microsoft to invest $10 billion in OpenAI, creator of A.I. tool ChatGPT

Microsoft is reportedly planning to invest $10 billion in OpenAI, the startup behind the popular artificial intelligence tool ChatGPT. This would be a major vote of confidence in the company and its technology, which is already being used by a number of major organizations.
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OpenAI is reportedly in talks to raise funding that would value the company at $29 billion. According to Semafor, the deal is part of a funding round that includes other investors.
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The deal's status is unclear, but term sheets sent to prospective investors indicated that the plan was to close the deal by the end of 2022, Semafor reported.
According to reports, Microsoft will receive a 75% share of OpenAI's profits until it has recouped its investment, at which point it will own a 49% stake in the company.
CNBC reached out to Microsoft and OpenAI for comment, but neither company was immediately available.
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The tech world has been abuzz with chatter about ChatGPT for several weeks. ChatGPT is a natural language processing model, meaning it is designed to generate text that appears as though a human wrote it.
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The AI model, which is a variant of the GPT-3 family of large language models, can be used for a variety of tasks, from developing code to writing college essays.
A bet on ChatGPT could help Microsoft boost its efforts in web search. The company’s Bing browser has only a small share of the global search engine market, but the deal could help the firm chip away at Google’s dominance by offering more advanced search capabilities.
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In December, Morgan Stanley published a report examining whether ChatGPT is a threat to Google. The report's author, Brian Nowak, wrote that language models could take market share away from Google "and disrupt Google's position as the entry point for people on the Internet."
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OpenAI, which was founded by Silicon Valley entrepreneur Sam Altman in 2015, launched its ChatGPT to the public in late November. Despite optimism over its potential, the project is burning through cash due to the overwhelming level of pressure on its servers arising from its virality. Five days after OpenAI released ChatGPT, Altman said that the chat research tool crossed 1 million users. OpenAI is a nonprofit research company that promotes friendly artificial intelligence in order to benefit humanity as a whole.
To read the full report, visit the Semafor website.