Microsoft To Invest $10 Billion in OpenAI Startup For Office Software

Andi C., Tech Times 10 January 2023, 01:01 pm

Microsoft is reportedly in talks of investing in the viral AI startup, Open AI, to integrate into their Office 365 system.

The tech community has been buzzing about ChatGPT for several weeks since it went viral. The AI model, a subset of the GPT-3 family of big language models, has been applied to various tasks, including programming and college essay writing.

According to Semafor, Microsoft has been in talks to invest $10 billion into the company that owns ChatGPT, the enormously popular program that has delighted both casual users and artificial intelligence researchers since its most recent version was published last month.

Although it is still unclear if the agreement has been reached, documents outlining its terms that were recently sent to prospective investors stated that closing by the end of 2022 was the target date.

What Is the OpenAI Startup?

In 2022, OpenAI, which Silicon Valley businessman Sam Altman established, made its ChatGPT available to the general public. The program is a natural language processing model, which means it is made to produce content that seems to have been written by a human.

CNBC reports that despite hopes for its future, the initiative is losing money because of the extreme amount of demand on its servers brought on by its virality. Altman reported that 1 million users had used ChatGPT five days after OpenAI published it.

After receiving the financing, which would also come from other venture capital firms, the company that invented ChatGPT, OpenAI, would be valued at $29 billion, per the sources.

What Is Microsoft's Plan For OpenAI?

According to Search Engine Journal, Microsoft is considering integrating OpenAI's ChatGPT technology into its well-known office suite, which includes Word, PowerPoint, and Outlook.

Users of Microsoft 365, formerly known as Office, may soon be able to utilize the program to write content using straightforward commands. This change can increase efficiency and productivity by enabling users to do activities more quickly and precisely.

Additionally, Microsoft may be able to increase its efforts in the Google-dominated web search industry. Although the company's Bing browser only has a small part of the worldwide search engine market, it is believed that the transaction will enable the company to challenge Google's hegemony by providing more sophisticated search features.

If the deal pushes through, Microsoft will receive a 75% cut of OpenAI's income up until it recovers its investment, at which point it will take a 49% ownership position in the company. The deal is part of a funding round with other investors involved that would value OpenAI at a whopping $29 billion, Semafor reported Tuesday, citing people familiar with the matter.

Although term sheets offered to potential investors said the sale was to be closed by the end of 2022, it still remains unclear whether the agreement has been concluded.