Microsoft plans to invest $10 billion in OpenAI, the startup behind the popular artificial intelligence tool ChatGPT, according to a report from Semafor.
The deal is part of a round involving other investors that would value OpenAI at $29 billion, Semafor reported Tuesday, citing people familiar with the matter.
It’s unclear whether the deal has been finalized, but forms sent to potential investors indicated the plan was to close the deal by the end of 2022.
Microsoft would get a 75 percent share of OpenAI’s profits until it recovers its investment money, after which the company would assume a 49 percent stake in OpenAI.
Reuters reported last month that a recent proposal from OpenAI to investors indicated that the organization expected revenues of $200 million next year and $1 billion by 2024.
Contacted by CNBC, Microsoft and OpenAI were not immediately available for comment.
For several weeks, the tech world has been abuzz about ChatGPT. The tool is a natural language processing model, which means it is designed to generate text that looks like it was written by a human.
The AI model, itself a variant of the GPT-3 family of large language models, has been used for everything from code development to academic essay writing.
By banking on ChatGPT, Microsoft could bolster its efforts in the Web search space, a market dominated by Google.
The company’s Bing browser has only a small share of the global search engine market, but the deal could help the company combat Google’s dominance by offering more advanced search capabilities.
Microsoft is increasingly interested in the opportunities offered by technology developed by artificial intelligence specialist OpenAI. Last October, the firm also launched the Designer tool, which includes DALL-E, the artificial intelligence image generator also designed by OpenAI.