Editor's PickInvesting

Microsoft moves in on $10bn backing for ChatGPT ‘sensation’

1 Mins read

Microsoft is weighing up a second investment in the developer behind the advanced ChatGPT chatbot, this time for $10 billion.

OpenAI, a company based in San Francisco, received $1 billion from Microsoft in 2019 and in November its artificial intelligence bot caused a sensation upon its release.

According to the news website Semafor, which cited sources familiar with the latest deal, Microsoft would reap 75 per cent of the start-up’s profits until recouping its investment. Other firms are also expected to participate.

The deal is said to value OpenAI at $29 billion, in line with previous reports that it was considering the sale of a batch of existing shares to investors as part of a tender offer. Such a valuation would make the company one of America’s most valuable start-ups.

OpenAI did not immediately respond to a request for comment. Microsoft declined to comment.

ChatGPT impressed users with its ability to swiftly offer detailed answers to questions, coherently summarising publicly available information, and attracted a million users days after its launch. Bullish analysts have suggested the tool could revolutionise the online search industry. Microsoft is widely expected to integrate it into its Bing search engine.

OpenAI was founded seven years ago as a non-profit research institute focused on ensuring that artificial general intelligence — autonomous technologies that could outperform humans — could be created safely for the benefit of all. It created a for-profit arm in 2019. Elon Musk was one of its founders but departed in 2018, citing a conflict with his AI work at Tesla.

OpenAI is also behind DALL·E 2, an image generation tool that creates pictures from users’ words.