Microsoft is looking to invest $10 billion into OpenAI

Patrick Devaney
Jan 11, 2023
Updated • Jan 11, 2023

Ever since OpenAI launched it on November 30th, ChatGPT has been taking the internet by storm, with innovative users finding a lot of impressive ways to make it do incredible things. However, further to the technical issues that we’ve highlighted in the past, there is another major issue that OpenAI needs to address as it attempts to establish itself as a long-term business. Namely, how to raise revenue and how to turn a profit.

At the moment, whenever a user enters a prompt into ChatGPT, OpenAI has to run it through the algorithm, which puts strain on its servers and essentially costs the company money. Essentially, this means that the more popular it gets, the quicker OpenAI will burn through its cash reserves. The race is on then to turn what many are calling revolutionary tech into profitable tech, unless the company can get its hands on more cash. And this is where Microsoft might be about to step in.

The software giant is in talk with OpenAI, with a view to investing $10 billion into the company. Rather incredibly, this would value the company at a whopping $29 billion in total.

As a part of the deal, Microsoft would get 75% of all profits generated by OpenAI until it recoups its original investment. Then, following that, Microsoft would hold a 49% stake in OpenAI, which would see it as being the majority shareholder. Other investors would hold another 49% between them and the original OpenAI non-profit organization would hold 2%.

Will ChatGPT become just another Microsoft app?

This sounds like an incredible deal for Microsoft, which has already started making plans about possible ways to incorporate the exciting new tech into existing products such as Microsoft Word, other Office apps, and the email client Microsoft Outlook. Even though we are still seeing an early version of the innovative chatbot, Microsoft has clearly seen enough to bet big on it potential to revolutionize many of the processes that traditional Office users are going through every day. It now looks like the company is looking to go even further but injecting the company with cash and looking to help steer it in the right direction.

In this regard, the massive investment will also give Microsoft the opportunity to bring OpenAI into Microsoft’s Cloud system, which would put what could possibly be the most popular consumer tech product of the next decade into a money-making position for Microsoft. This may be causing exasperation over at Google HQ, which is now seeing a key rival taking advantage of tech that it helped develop.

This does raise an important issue to consider, however, with this investment, which is that although ChatGPT is getting all the headlines now, it does not mean that it will convert that into market dominance moving forward. Generative AI looks set to become a highly competitive field, with many developers likely to bring their products to market over the next few years. At the moment, however, the biggest competitor to OpenAI looks to be the British based Stability AI, which already has a comparative suite of products to those offered by OpenAI.

All that being said, however, this seems like a really clever move by Microsoft, which help to keep it at or near the front of what is becoming a very interesting market and an exciting new frontier for tech fans and creatives.

Article Name
Microsoft is looking to invest $10 billion into OpenAI
Reports are coming saying that further to Microsoft's plans to incorporate OpenAI's ChatGPT into Micorosft apps and servies, the company is also considering a bold $10 billion investment in the company.
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  1. Norio said on January 12, 2023 at 8:19 pm

    “… how to raise revenue and how to turn a profit.”

    If it’s associated with Microsoft, then it will start downloading and harvesting user information without the user’s permission. Then ads will be put into ChatGPT that target users based on this information. The information will also be sold (on a subscription basis) to other companies who can’t wait to invade our privacy.

  2. Anonymous said on January 12, 2023 at 5:06 am

    How about Microsoft invest in a better Windows team? Current team is ruining Windows.

  3. John G. said on January 11, 2023 at 7:03 pm

    I hope that ChatGPT will redesing the W11’s taskbar and the explorer menu as soon as possible. Those 10 billion would be well invested in such the case. It should be hilarious. Thanks for the article.

  4. Stalin Hat said on January 11, 2023 at 6:27 pm

    Interesting how you used a picture of Bill Gates (who doesn’t really work at Microsoft anymore) and then the 2030 agenda pin, so maybe you should stop promoting this OpenAI and ChatGPT, seems like you understand all this is planned to just make humans dumber than they already are and of course, controlling them more.

  5. Anonymous said on January 11, 2023 at 1:21 pm

    RIP OpenAI, started off great and now ruined everyway possible.

    1. Kax Marl said on January 11, 2023 at 6:24 pm

      Maybe you should research and stop talking nonsense.

      Greg Brockman, who is the President and Co-founder of OpenAI, in his twitter account said that the partnership with Microsoft was the reason they got where they are now because they worked close to make Azure good for what OpenAI needed.

      Why do you think Microsoft is the first one saying they will add it to Bing and Office? This dumb AI crap is so stupid, people just want/like it because that means one more way where people can be more and more lazy and use less the brain (humans already tend not to use the brain so much, like 99+% of the time).

      If your comment made sense, that means nobody would be talking about this crap because it was “ruined” way before you even knew about OpenAI and ChatGPT, since the partnership has been in place for many years, 2019, when “OpenAI LP received a US$1 billion investment from Microsoft and Matthew Brown Companies”.

      Maybe it is time to be different and use it.

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