Microsoft Corp (NASDAQ: MSFT) wants to invest another $10 billion on OpenAI – the artificial intelligence company behind ChatGPT, a Semafor report suggested on Tuesday.
What’s in it for Microsoft Corp?
The venture round will potentially value OpenAI at $29 billion that, in return, will share 75% of its profits with the tech behemoth until it recovers the money it’s investing.
Afterwards, Microsoft will own 49% of OpenAI. Reacting to the stock market news on CNBC’s “Squawk Box”, Semafor’s Liz Hoffman said:
It’s crazy money. They’re going to end up owning almost half of this thing for $10 billion. It’s really a strategic investment for them. So, I would think about it more like an M&A deal than a venture round.
Both Microsoft and OpenAI are yet to official comment on the report.
Microsoft wants to challenge Google
Microsoft was recently reported working with OpenAI on a ChatGPT-enabled “Bing” in a bid to challenge Google’s dominance on the search market. According to Hoffman:
Microsoft is buying market share. It’s a huge cloud computing play for Microsoft. They’re number two in that business, behind Amazon. And they really think this is going to power the next generation of their software.
Microsoft stock has lost more than 10% since mid-December.
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