Summary

• Microsoft is reportedly in talks to invest $10 billion in OpenAI, the company behind the popular app ChatGPT.
• The funding round would value OpenAI at $29 billion and also include other venture firms.
• The deal would stipulate that Microsoft would receive 75% of OpenAI's profits until it recoups its investment, after which it would take on a 49% stake in the company, while other investors would receive 49%, and OpenAI's nonprofit parent would retain 2%.

It has been reported that Microsoft is in negotiations to invest $10 billion into OpenAI, the company behind the widely-popular app ChatGPT. The funding round, which is also expected to include other venture firms, would value OpenAI at $29 billion, including the new investment, according to sources familiar with the matter. However, it is unclear if the deal has been finalized. According to documents circulated to prospective investors, the targeted closing date for the deal is the end of 2022. The terms of the deal stipulate that Microsoft would receive 75% of OpenAI's profits until it recoups its investment. Afterwards, the structure of ownership will revert to reflect Microsoft's 49% stake, other investors will receive 49% and OpenAI's nonprofit parent will retain 2%. There is also a profit cap that varies for each set of investors. However, it should be noted that the terms and the investment amount are subject to change, and the deal could fall apart. Both Microsoft and OpenAI have refused to comment on the matter.