Here’s What It Means For Investors

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Key takeaways

  • ChatGPT has become the talk of the town as users are shocked by how impressive this new technology is. The chatbot can write poetry, create content and even help you solve problems. The uses of the product are wide-ranging, and those who try it can’t help but rave about it.
  • Microsoft is now considering investing $10 billion in OpenAI, which would bring the valuation of the AI startup to $29 billion as they look to monetize the chatbot in 2023.
  • The field of artificial intelligence is changing rapidly, and tech giants are looking to invest billions of dollars in this space in a race to create the best new tools.

You can’t turn anywhere without hearing about the revolutionary AI platform ChatGPT. The product can write a surprising amount of material from poetry to marketing copy. The advancements in artificial intelligence have been more impressive than ever in the past few months. Microsoft is considering investing $10 billion in OpenAI, the maker of the ChatGPT, as the company attempts to become more competitive with other tech giants in certain markets.

We’ll break down why Microsoft would even want to invest such a heavy amount of capital into this startup. We’re also going to look at what this news means for AI investors as we’ve seen tech companies struggle in 2022.

What’s ChatGPT all about?

ChatGPT is the chatbot that was released late last year by OpenAI, a company that Elon Musk and Sam Altman initially started. The product had over a million users within the first week of December, and you couldn’t stop hearing about the various capabilities on social media and elsewhere. However, the popularity of the product also means that the tool is burning through cash due to the pressure put on the servers from the rapid adoption. The program uses OpenAI’s GPT-3.5 language mode, an upgraded model version released in 2020.

Adopters of ChatGPT have been using the product for both fun and functional purposes. You can have the chatbot write wedding speeches, create messaging for dating apps, write your marketing copy for you, and even give the tool complex directions to follow. That said, there has been plenty of speculation over what’s next for this revolutionary tool. We finally have some hints as to how this product will fit into the marketplace.

Microsoft considers investing $10 billion in OpenAI

Semafor reported that Microsoft was considering putting $10 billion into OpenAI, the company responsible for ChatGPT. The next round of funding would include Microsoft and other venture firms, bringing the valuation of the AI startup to $29 billion.

Microsoft would reportedly put down $10 billion for a 75% share of the profits that OpenAI earns until the money on the investment is paid back. Then when Microsoft breaks even on the $10 billion investment, they would get a 49% stake in OpenAI. None of this has been confirmed by either party, but the reports have been circulating for over a week now. While the deal seems slightly complicated from the outside, there aren’t any confirmations on if the cash infusion has happened yet. The documents sent to prospective investors outlined the terms, and a target closing date was set for the end of 2022.

Microsoft has already invested in this startup at earlier stages. In 2019, Microsoft originally put in $1 billion in the San Francisco startup to help get the product off the ground. Since then, Microsoft has silently invested another $2 billion into the product, according to industry sources.

Why’s Microsoft considering investing in OpenAI?

Microsoft is looking to compete with other tech giants in the space of AI. Notable competitors like Google and Amazon have already heavily invested in the field of AI. We see the power of AI with Google from the precise directions of the Maps product to how accurately our photos are stored. Amazon relies on the power of AI for various aspects of its business, from recommending products to customers on the online commerce platform to the Alexa device that many of us have in our living rooms.

Microsoft is looking to compete with Google

Microsoft may be looking to become more competitive in search engine results as the global arms race in AI continues. It’s no secret that Google dominates the search engine market, as Microsoft’s Bing has only a tiny fraction of market share. Rarely do you hear anyone refer to “binging” for something as the term “googling” has become synonymous with searching for something online. It appears that Microsoft is ready to become competitive in this space as they plan on incorporating ChatGPT into BIng for more accurate and helpful search results.

According to analysts, Microsoft has many opportunities to add the ChatGPT technology to its current product offerings. The AI-powered tool could improve the Bing search engine, add value to Microsoft Office products and become valuable on the Azure cloud platform.

How’s Microsoft involved in AI?

Microsoft launched Microsoft Designer, a graphic design app that utilizes the power of AI to create graphics from scratch and social media images. Microsoft also operates an entire portfolio of AI-related services under the Azure platform. The company also announced a partnership with Meta to provide the workplace of the future.

The paid version of ChatGPT is coming

OpenAI recently revealed that they would be changing for the chatbot soon, and many users expected monetization to commence in the near future. The premium version of the product would be referred to as a ChatGPT Professional. This pro version would have no unavailability windows, faster responses (no throttling) and as many messages as you need.

The pricing for the premium product hasn’t been announced yet as the company appears to be still figuring this part out, but it’s clear that there’s no pressure on the company to start the monetization process.

When we first wrote about ChatGPT, we mentioned how a recent investor presentation indicated that the company planned on bringing in $200 million in revenue in 2023 and $1 billion annually by 2024. At the time, the startup was only generating revenue by charging developers licensing fees for the use of the technology. It now looks like a premium version will be coming soon. The waitlist link doesn’t include any information on the possible pricing as the survey was designed to inquire about possible price points.

What does this mean for AI investors?

We recently wrote about ChatGPT and DALL-E 2, two innovative products that have been revolutionary for consumer AI. These will both impact various industries, and we still have to figure out how to proceed with these new tools from a business and ethical position.

If you’ve been investing in AI, you know it’s been a challenging year for the space. We recently looked at some of the top AI stocks, and we discovered that many publicly traded companies dropped significantly in 2022.

The $10 billion investment in ChatGPT signifies that tech giants will continue to invest in the advancement of AI moving forward. While stocks in this sector didn’t have a good year in 2022, there’s optimism that the overall market will bounce back in 2023. Most companies that rely on AI’s power don’t solely focus on this sector. For example, Tesla hosts an annual AI Day where they actively recruit the sharpest minds and top talent in the field, but the company is focused on electric vehicles.

How to invest in the market with AI

You don’t have to look any further to see the power of AI in action, as Q.ai was created to use AI to offer investment options for those who don’t want to be tracking the stock market on a daily basis.

Q.ai utilizes three key methods to help investors make money. These include:

  1. Creating Investment Kits. This involves selecting stocks and other securities to be placed in a diversified Kit. AI is leveraged to assess every possible investment each week to bundle products into Kits like precious metals, tech and more.
  2. Mitigating risks while trying to grow your portfolio. AI weights the assets in each Investment Kit to reduce the risks, a truly unique and highly effective application for the everyday investor.
  3. Offering Portfolio Protection. This is a feature that uses AI to predict and forecast possible risks in the market to adjust the allocations even further to protect against losses.

If you genuinely want to make money from AI, your best bet is to invest in the broader market via Q.ai. The AI-powered Investment Kits make investing easy and strategic.

Download Q.ai today for access to AI-powered investment strategies.



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