Microsoft has locked a deal of $80bn or more with artificial intellegence company OpenAI, the New York Times has reported this news on Friday.
The company may initiate a tender offer to sell its existing shares, with venture firm Thrive Capital leading the offer, as reported. Employees will not need to cash out their shares, unlike in a traditional funding round.
Embed from Getty ImagesMicrosoft has locked a deal of $80bn or more with artificial intellegence company OpenAI
OpenAI remained silent in the face of a comment request.
In a reminiscent move, the AI juggernaut sealed a parallel agreement in the previous year. Thrive Capital, Sequoia Capital, Andreessen Horowitz, and K2 Global, all heavyweight venture capital players, joined forces to acquire OpenAI shares through a tender offer, pegging the company’s value at approximately $29 billion, according to sources. OpenAI’s financial journey has been punctuated by significant investment milestones, notably Microsoft’s hefty $10 billion injection in January 2023. Prior to that, the company had secured backing in both 2019 and 2021.
The emergence of OpenAI’s ChatGPT in the latter part of 2022 has ignited a frenzy within the AI realm, prompting businesses to delve into innovative ways to harness its potential. AI integration has become ubiquitous, evident in the evolution of products like Microsoft’s Bing search engine, which relentlessly pursues advancements in its AI endeavors.
In a recent development, OpenAI unveiled Sora, a groundbreaking tool capable of crafting videos from mere text prompts, amplifying the scope of AI applications. Preceding this announcement, the organization disclosed its exploration into enhancing ChatGPT’s memory capacity, enabling it to retain more of its users’ conversational history.
Meanwhile, OpenAI’s CEO, Sam Altman, has reportedly been engaged in discussions aimed at acquiring a chip manufacturer or enhancing the company’s access to the costly AI chips pivotal to its operations.
This significant investment marks a pivotal moment for OpenAI, following a tumultuous period in late 2023 characterized by Altman’s brief dismissal by the board, swiftly followed by his reinstatement amidst vehement employee backlash.
However, the substantial influx of investments into OpenAI has not gone unnoticed by regulators. European Commission officials have expressed intentions to scrutinize Microsoft’s backing for potential antitrust implications, while the Federal Trade Commission in the US has initiated investigations into whether investments from tech giants like Microsoft, Google, and Amazon in AI companies, including OpenAI, pose threats to competition.
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what a news.