Microsoft Corp (NASDAQ: MSFT) has announced that it is making a significant multi-year investment in OpenAI, a startup company known for developing the viral ChatGPT chatbot. This move follows Microsoft’s previous investments in OpenAI in 2019 and 2021 and is intended to expand the use of artificial intelligence technology in Microsoft products. The exact financial terms of the deal weren’t revealed.
As per the Wall Street Journal, OpenAI has reportedly been in talks this month to sell existing shares in a tender offer, brining the company’s valuation to a whooping $29 billion— making it one of America’s most valuable company even without generating meaningful revenue. The investment from Microsoft shows the significant resources that the company is dedicating to incorporating artificial intelligence software into its product suite, which ranges from design app Microsoft Design to search app Bing.
The investment will also help to fund the computing power that OpenAI requires to run its various products on Microsoft’s Azure cloud platform. Microsoft CEO Satya Nadella recently stated that the company plans to incorporate artificial intelligence tools into all of its products and make them available as platforms for other businesses to build on.
OpenAI was founded in 2015 as a non-profit organization, receiving over $1 billion in investments from big names including Tesla CEO Elon Musk and LinkedIn co-founder Reid Hoffman. The company’s goal has long been to develop artificial general intelligence, where the technology is able to learn and understand the same information as humans.
Information for this briefing was found via the Wall Street Journal, The Information, and the sources and companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.