Semafor: Microsoft Looking to Invest $10B in OpenAI, Maker of ChatGPT

Liz Hoffman and Reed Albergotti, reporting for Semafor:

The $29 billion is a big valuation for OpenAI, a company that hasn’t yet figured out its business model, and $10 billion is a big price tag for Microsoft’s shareholders. [...] If OpenAI figures out how to make money on products like ChatGPT and image creation tool Dall-E, Microsoft will get 75% of the profits until it recoups its initial investment.

Beyond the financial risks and rewards for Microsoft, the bigger prize is that it gets to work alongside OpenAI in developing the technology on Microsoft Cloud, which instantly puts Microsoft at the forefront of what could be the most important consumer technology over the next decade.

That’s a huge coup for Microsoft, especially considering Google, a rival, has helped pioneer some of the technology used by OpenAI. Microsoft was also in talks to incorporate some of those features into its other programs, like Word and Outlook email, The Information reported.

Clippy, but actually smart and useful. That’d be one hell of a feature.

Dare Obasanjo, on Twitter:

Satya Nadella cements his entry in the CEO hall of fame by spotting OpenAI early and locking down access to its fruit for use in Office and Bing.

FTC is worried about Activision which is gaming’s past when Microsoft is locking down the future of AI.

It seems way early to credit this investment as a hall of fame decision, but it does seem forward-looking in a way that the Activision acquisition does not.

★ Wednesday, 11 January 2023