Microsoft Might Invest $10 Billion in Money-Losing ChatGPT Parent — What Investors Need to Know

The world experienced terrible disruption in 2022 from inflation and Federal Reserve interest rate hikes, a terrible year for the stock market, global political turmoil, the war in Europe, and humanitarian crises. But 2022 was also the year millions of people were introduced to the advanced capabilities of artificial intelligence (AI) via the controversial apps DALL-E 2 and ChatGPT. At least one tech giant is on board. Microsoft (MSFT 0.76%) is reportedly in talks to invest $10 billion in DALL-E 2 and ChatGPT’s parent company, OpenAI.

If you’ve been wondering (or even asked ChatGPT) how you might be able to invest in these AI apps, the answer could wind up being Microsoft. But $10 billion isn’t exactly chump change. Here’s what Microsoft shareholders need to know. 

Microsoft is already at the party

If you’re a Microsoft shareholder, you apparently already have a stake in DALL-E 2 and ChatGPT. Microsoft reportedly led a $1 billion funding investment round into OpenAI back in 2019, striking a deal to give the start-up more cash to continue developing its AI algorithms, as well as a partnership in which OpenAI would use Microsoft’s Azure cloud computing platform.

OpenAI was founded at the end of 2015 by Sam Altman and Elon Musk, along with others, with the goal of ensuring AI “benefits all of humanity.” Musk left the company in 2018, and Altman is now the CEO.

With close ties to Microsoft already, it isn’t a surprise that the sudden popularity of DALL-E 2 and ChatGPT would lead the software titan to deepen the relationship. Microsoft CEO Satya Nadella has been talking about how cloud computing (data and applications housed in a remote data center and accessed by users via the internet) can help organizations “do more with less.” Used the right way, AI could most certainly help Microsoft continue to deliver on that promise to its customers. 

But $10 billion is a hefty price tag, even for Microsoft, at this particular time. At the end of September 2022, the company reported having $107…

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