Microsoft Digs its Claws in ChatGPT Maker OpenAI

Posted on 01/23/2023

Microsoft Corporation made a multibillion-dollar investment in ChatGPT-maker OpenAI. Microsoft is investing billions in OpenAI over a period of years.

The deal marks the third phase of the partnership between the two companies. Microsoft invested in OpenAI in 2019 and 2021. OpenAI remains a capped-profit company and is governed by the OpenAI non-profit. OpenAI makes money through partnerships with companies & organizations. These partnerships can take many forms, such as joint research projects, consulting arrangements, or licensing agreements. GPT stands for Generative Pre-trained Transformer, which is a machine learning model that uses a neural network trained on internet data to generate text.

OpenAI works closely with Microsoft’s cloud service Azure. In July 2019, Microsoft backed OpenAI with US$ 1 billion, and the investment made Microsoft the “exclusive” provider of cloud computing services to OpenAI. Microsoft said that Azure will continue to serve as OpenAI’s exclusive provider. Pre-deal, Microsoft had already invested more than US$ 3 billion in OpenAI.

Akin Gump Strauss Hauer & Feld LLP represented OpenAI in its multiyear, multibillion-dollar investment from Microsoft.

    Get News, People, and Transactions, Delivered to Your Inbox