Microsoft reportedly plans to invest $10 billion in creator of buzzy A.I. tool ChatGPT

Microsoft is reportedly planning to invest $10 billion in OpenAI, the company behind the popular AI tool ChatGPT. According to a report by Semafor, the investment is part of a funding round that values OpenAI at a staggering $29 billion. The details of the deal are not yet clear, but the term sheets sent to potential investors suggest that the deal is expected to close by the end of 2022.

Microsoft will reportedly receive a 75% share of OpenAI’s profits until they recoup their investment, after which they

would own a 49% stake in the company. ChatGPT, a natural language processing model designed to generate text that resembles human writing, has generated buzz in the tech world. The AI tool can be used for various purposes, from coding to writing essays, and could potentially help Microsoft improve its web search capabilities, currently dominated by Google. In December, Morgan Stanley published a report examining the potential threat ChatGPT poses to Google. The lead analyst on Alphabet, Brian Nowak, wrote that language models could disrupt Google’s position as the go-to entry point for internet users. Despite the optimism surrounding ChatGPT’s potential, the high demand for the tool has put a strain on OpenAI’s servers and depleted their funds. Sam Altman, the founder of OpenAI, announced that the chat research tool reached 1 million users just five days after its release in November

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