In a shocking turn of events, technology behemoth Microsoft is planning to invest a massive $10 billion in OpenAl, the company behind the wildly popular Generative AI-powered chatbot ChatGPT.
At present, OpenAI is valued at $20 billion and if this investment from Microsoft comes to fruition, OpenAl’s valuation will reach $29 billion with the addition of funding from other venture firms.
Microsoft’s decision to invest $10 billion in OpenAI is a sign of the company’s confidence in the future of AI and its potential to change the technology landscape. This is not the first time Microsoft has shown interest in OpenAl, as the company had invested $1 billion in 2019.
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As per report, in terms of OpenAI’s shares, this investment would give Microsoft a 75% share of OpenAl’s profits until its investment is recovered, and then shift to a structure where Microsoft would hold 49% of the shares, other investors 49%, and OpenAl’s parent organization 2% (yes, only).
This investment is a major opportunity for OpenAl to established a clear business strategy. According to OpenAl’s CEO, Sam Altman, the ChatGPT incurs a some cost in computing power for each user interaction. However, with Microsoft’s investment, OpenAl will have the necessary resources to explore ways to monetize products like ChatGPT and Dall-E, an image creation tool.
By teaming up with OpenAl to develop technology on Microsoft Cloud could be game-change, not in just terms of finances, but also positioning itself as a leader in what is predicted to be the most significant consumer technology of the next decade.
While some may see this as a gamble for Microsoft, it is clear that the company sees the potential for huge returns on this investment in the future of AI. As the competition in the AI industry heats up, this partnership between Microsoft and OpenAl is sure to shake things up and pave the way for a new era of AI innovation.
