How much are you willing to sell your soul for? In OpenAI’s case, it was $1B — followed by another $10B.

In 2020, Microsoft (NASDAQ:MSFT) invested $1B into OpenAI and purchased an exclusive license to GPT-3’s underlying tech.

Now, they’re looking to invest another $10B into OpenAI. Under the reported deal terms, Microsoft receives a:

• 75% share of OpenAI’s profits until Microsoft gets its investment back.
• 49% stake in OpenAI (after all the profits are paid out), which values it at $29B.

According to recent reports, Microsoft is already experimenting with adding OpenAI’s tech to its products:

• Including OpenAI’s text-generating GPT model in Word, PowerPoint and Outlook.
• Launching a ChatGPT-powered Bing search engine to answer queries.

Why not just buy OpenAI? That’d be a one-way ticket to the Federal Trade Commission’s desk — who’s still trying to block Microsoft’s Activision acquisition.

Microsoft doesn’t need to own OpenAI. With the deal, Microsoft can benefit from owning ChatGPT without the troubles.

Elsewhere in AI…

Unfortunately, the hype around AI hasn’t made its way to public AI stocks.

• Remember when Musk tweeted, “use Signal,” and an obscure company Signal Advance soared 438%?
• C3.ai (NYSE:AI) — which has “AI” in both its ticker and name, only continued its 90% plus decline.

Other companies that tout using AI to power their product have yet to see much luck. Since OpenAI was launched:

• AI-powered insurance provider Lemonade (NYSE:LMNBD) is down 30%.
• AI-powered loans provider Upstart (NASDAQ:UPST) is also down nearly 30%.

The momentum around AI has largely stayed within the private markets. Every hour, another “AI for X” startup gets launched.

2023 is already turning into an eventful year for AI. And don’t expect other large tech giants to sit and watch.

Alphabet’s Google (NASDAQ:GOOG) may be at the most risk, and how they react will certainly be closely monitored.