Microsoft announces multi-billion dollar investment in ChatGPT maker OpenAI

Microsoft CEO Satya Nadella speaks at the company’s Ignite Spotlight event in Seoul on November 15, 2022.

Seong Joon Cho | Bloomberg | Getty Images

Microsoft announced Monday a new multi-year, multi-billion dollar investment with ChatGPT maker OpenAI.

Microsoft declined to provide a specific dollar amount, but Semafor reported earlier this month that Microsoft was in talks to invest as much as $10 billion.

The deal marks the third phase of the partnership between the two companies, following Microsoft’s previous investments in 2019 and 2021. Microsoft said the renewed partnership will accelerate breakthroughs in AI and help both companies commercialize advanced technologies in the future.

“We have formed our partnership with OpenAI around a shared ambition to responsibly advance groundbreaking AI research and democratize AI as a new technology platform,” Microsoft CEO Satya Nadella said in the release.

OpenAI works closely with Microsoft’s Azure cloud service. In July 2019, Microsoft backed OpenAI with $1 billion, and the investment made Microsoft the “exclusive” provider of cloud computing services for OpenAI. Microsoft said Monday that Azure will continue to serve as OpenAI’s exclusive provider.

Microsoft’s investment will also help the two companies achieve supercomputing at scale and create new AI-powered experiences, the release said.

OpenAI is ranked by AI researchers as one of the top three AI labs worldwide, and the company has developed AI game-playing software that can beat humans in video games like Dota 2. However, it has arguably gained more attention for its AI text generator GPT -3 and its quirky AI image generator Dall-E.

ChatGPT automatically generates text from written prompts in a way that is far more sophisticated and creative than the chatbots of Silicon Valley’s past. The software debuted in late November and quickly turned into a viral sensation as tech executives and venture capitalists gushed about it on Twitter, even to compare it to Apple’s debut of the iPhone in 2007.

The technology also caught the attention of Google executives, who said with all hands at a recent meeting that while it has similar AI capabilities, Google’s reputation could suffer if it moves too quickly with AI chat technology.

OpenAI’s founders included Sam Altman, Elon Musk, CEO of Tesla and SpaceX, Greg Brockman, Ilya Sutkever, Wojciech Zaremba, and John Schulman. The group pledged to invest more than $1 billion in the venture at launch. Musk resigned from the board in February 2018, but remained a donor.

— CNBC’s Jonathan Vanian and Jennifer Elias contributed to this report

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