Microsoft Makes a Multibillion-Dollar Bet on the Company Behind ChatGPT

Microsoft announced a new multiyear investment in OpenAI, reported to be about $10 billion, extending a partnership that began in 2019. OpenAI's programs will run on Microsoft's computers and be built into Microsoft's products.

Microsoft announced this morning that it is making what it called a "multiyear, multibillion-dollar investment" in OpenAI, the company behind ChatGPT. Neither side gave a number; reporting last week put it at around $10 billion. Microsoft had already invested $1 billion in 2019 and more since, so this is the third and by far the largest round.

The arrangement is unusual. OpenAI started in 2015 as a nonprofit and still has one at the top of its structure, with a for-profit company underneath that caps how much investors can earn. Microsoft gets a large share of OpenAI's profits until its investment is repaid many times over, at which point the shares revert. In the meantime, OpenAI's programs run on Microsoft's cloud computers — the enormous cost of training and operating them is what the money is for — and Microsoft gets to build those programs into its own products.

Some of that has already happened. Microsoft's coding tool GitHub Copilot uses OpenAI technology, and the company has said OpenAI's writing and image programs will appear in its Office software and its Bing search engine. Bing, which has spent two decades as a distant second to Google, is the product to watch: a search engine that answers in sentences is the first real change to the idea of a search engine since Google invented the modern one.

For OpenAI, the money answers the question raised by the last two months: what does a research lab do when its free demonstration becomes the fastest-growing consumer product anyone has seen? It gets the computers to keep it running, and a partner to sell it.