ChatGPT parent Open AI gets multibillion-dollar boost from Microsoft


Photo illustration by Jonathan Raa/NurPhoto via Getty Images)

Microsoft is investing billions more dollars into the burgeoning artificial intelligence company OpenAI as its ChatGPT chatbot gains popularity, the companies announced Monday.

The “multiyear, multibillion” financial terms were not shared. Still, a source told Bloomberg it’s a US$10 billion investment, matching reports earlier this month on the size of the investment and expanding upon the US$1 billion Microsoft invested in OpenAI in 2019.

Microsoft shares jumped 1% in early trading, and the stock is now up 7% since January 9, when reports first emerged on Microsoft nearing putting US$10 billion into OpenAI.

The “next phase” of Microsoft and OpenAI’s partnership will give the former “access to the best AI infrastructure, models, and toolchain with Azure to build and run their applications,” Microsoft CEO Satya Nadella said in a statement accompanying the release.

A $10 billion investment from Microsoft would value OpenAI at $29 billion, Semafor reported earlier this month, though it’s unknown if that valuation holds under the finalized terms.

ChatGPT was launched to the public last November to widespread wonderment at the model’s ability to replicate human speech.

The OpenAI announcement comes five days after Microsoft announced it would cut 10,000 jobs this year, representing about 5% of its workforce. Nadella named AI as one of the chief reasons for the layoffs in an email to employees: “The next major wave of computing is being born with advances in AI, as we’re turning the world’s most advanced models into a new computing platform,” he said.

Microsoft is “not going to be left behind on what could be a potential game-changing AI investment,” Wedbush analyst Dan Ives wrote in a Monday note to clients. “In the AI race today, Nadella & Co. are ahead of the rest of Big Tech, and this investment is a major notch on the AI belt.”