Microsoft may have closed a deal to buy a stake in artificial intelligence research laboratory OpenAI.
Semafor, which first reported the development, said it’s unclear if the deal has been completed. Documents reportedly sent to prospective investors in recent weeks suggested Microsoft was aiming to complete the transaction by the end of 2022.
Semafor said the deal would give Microsoft 75% of OpenAI’s profits until it recoups its investment. Afterwards the marker of Windows and Xbox would hold a 49% stake in the AI firm. Other investors would control 49%, leaving the remaining 2% to OpenAI’s nonprofit parent.
Profit caps will vary for each set of investors.
Microsoft did not immediately respond to FOX Business for requests for comment. OpenAI did not immediately respond to Reuters requests for comment.
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Announced in November last year, ChatGPT is a chatbot built atop the parent company’s GPT-3 series of language models.
The conversational bot utilizes large databases and will respond to user questions and create other content on a wide array of subjects. Among many other forms, responses include answers, essays, legal briefs, and computer code.
The Wall Street Journal reported last week that OpenAI was in talks to sell existing shares at a roughly $29 billion valuation in a tender offer that would attract investment of at least $300 million.
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OpenAI charges developers licensing its technology about a penny or a little more to generate 20,000 words of text, and about 2 cents to create an image from a written prompt.
It spends about a few cents in computing power every time someone uses its chatbot, Altman recently said in tweet that has raised concerns about OpenAI’s cash burn.
Reuters reported last month a recent pitch by OpenAI to investors said the organization expects $200 million in revenue next year and $1 billion by 2024.
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Microsoft in 2019 invested $1 billion in OpenAI, founded by Elon Musk and Sam Altman. Microsoft’s cloud services arm also provides the computing power needed by the AI firm.
Microsoft last year unveiled plans to integrate image-generation software from OpenAI into its search engine Bing. A recent report from the Information said similar plans were underway for ChatGPT as Microsoft looks to take on market leader Google Search.
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Reuters contributed to this report.