Microsoft has announced plans to invest $10 billion in OpenAI. The deal is also a part of a seed round where the value of OpenAI can go up to $29 billion.
According to reports, Microsoft will reportedly get a 75% share of OpenAI’s profits until it makes back the money on its investment, after which the company will assume a 49% stake in OpenAI.
It is not yet clear if the deal has been finalized between both companies, but term sheets sent to prospective investors indicate that the plan is to close the deal by the end of 2022.
The AI tool is a natural language processing model, which is designed to generate text that appears as though a human wrote it. The AI model has been used for developing code for writing college essays within a short span of time.
Microsofts bet on ChatGPT could help the company expand its actions in web search, a market currently dominated by Google. Microsoft’s Bing browser has only a small share of the global search engine market. However, if this deal gets finalized, it could help Microsoft chip away at Google’s dominance by offering more advanced search capabilities.
In the last month of 2022, a study was produced by Morgan Stanley that studied the potential competition of ChatGPT with Google
The head analyst of Alphabet at the bank, Brian Nowak, stated in the report that natural language processing tools have the potential to grab a portion of the market and displace Google as the primary entry point for users on the internet.
The launch of OpenAI’s ChatGPT to the public, which took place in November, was initiated by a Silicon Valley entrepreneur named Sam Altman, who created the organization in 2015
Despite the positive outlook for the tool, it is using a large number of funds because of the high traffic on servers from its popularity. Altman mentioned that within five days of its launch, ChatGPT reached 1 million users.
The investment by Microsoft in OpenAI is a significant move for both companies. The partnership between Microsoft and OpenAI will potentially bring advanced language models to the market, which could disrupt Google’s position in the search engine market
Additionally, the funding will allow OpenAI to continue the development of its AI tools, including ChatGPT, which has already seen success in the short time since its release
This move highlights the growing importance of artificial intelligence in the tech industry and the need for companies to invest in AI technologies to remain competitive in the market.
The move also demonstrates the growing trend of big tech companies investing in artificial intelligence startups
These investments allow companies such as Microsoft to gain access to cutting-edge technologies and expertise, which can help them to stay ahead of the competition
It also allows startups like OpenAI to scale up their operations and bring their products to a wider audience.
The partnership between Microsoft and OpenAI is also a positive sign for the broader AI community. With Microsoft’s resources and expertise, the partnership will help to accelerate the development and adoption of AI technologies.
Additionally, OpenAI’s cutting-edge AI models, such as ChatGPT, will be brought to a wider audience, which will help to advance the field of natural language processing.