Microsoft Is Reportedly In the Talks for A New Round of Funding in OpenAI

It is claimed that the company is now in advanced discussions to increase its investment in OpenAI as it seeks to further incorporate AI into its products and keep OpenAI’s business away from rivals.

Microsoft is reportedly in advanced negotiations for a new round of funding in OpenAI, the artificial intelligence research laboratory known as a creator of DALL-E, the neural networks-powered tool capable of creating any image from text input. 

As reported by The Wall Street Journal, which cites a person familiar with the matter, the tech giant, which already backed Open AI in 2019, is planning a new round of investments that will help it further incorporate artificial intelligence into its products. According to the WSJ, the parties have been in talks in recent weeks but no agreement has been reached yet and the funding amount could change.

Earlier on Thursday, The Information also reported the talks on fundraising between the two sides. According to the outlet's sources, the new deal would follow a previously undisclosed sale of OpenAI stock by existing shareholders last year which valued the company at nearly $20 billion. Investors who purchased the OpenAI stock included Sequoia Capital, Tiger Global Management, Bedrock Capital, and Andreessen Horowitz.

The Information also noted that the new deal could help Microsoft facilitate Azure usage as well as keep OpenAI’s business away from rivals including Amazon Web Services and Google Cloud.

OpenAI was formed in 2015 as a non-profit organization with $1 billion in pledges from Tesla CEO Elon Musk, LinkedIn co-founder Reid Hoffman, and other investors. In 2019, OpenAI created a "capped" for-profit company and partnered with Microsoft which invested $1 billion in the company. 

In January 2021, OpenAI introduced DALL-E – an AI system that can create realistic images from a description, and in April 2022, it released the improved version of the system, DALL-E 2, which is able to generate more realistic and accurate images with better resolution.

Last week, Microsoft announced that OpenAI's DALL-E 2 is integrated with its new products including the graphic design app, Microsoft Designer, and Image Creator, a new feature that is adding an AI text-to-image model to Microsoft's search engine Bing.

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