OpenAI, the artificial intelligence company backed by Microsoft, has recently completed a deal that values the company at an impressive $80 billion or more, according to multiple sources familiar with the matter. In this deal, OpenAI sold existing shares in what is known as a tender offer led by venture firm Thrive Capital. What makes this deal unique is that employees of OpenAI have the opportunity to cash out their shares instead of going through a traditional funding round to raise money for the company.
This is not the first time OpenAI has engaged in this type of deal. Early last year, the company agreed to a similar arrangement, with venture capital firms including Thrive Capital, Sequoia Capital, Andreessen Horowitz, and K2 Global purchasing shares in a tender offer. This deal valued OpenAI at around $29 billion.
OpenAI has had a history of attracting major funding rounds. In January 2023, Microsoft invested a whopping $10 billion in the company, and OpenAI also received funding in 2019 and 2021. The introduction of OpenAI’s ChatGPT in late 2022 caused quite a stir in the AI world, sparking interest in companies looking to harness the power of this technology. AI has since been integrated into various products, including Microsoft’s Bing search engine, as the company continues to push the boundaries of AI development.
Recently, OpenAI made headlines with two exciting announcements. The company launched a tool called Sora, which has the capability to generate videos from text prompts. Additionally, OpenAI revealed that it is experimenting with enhancing the memory of ChatGPT, enabling it to remember more of the conversations it has had with users. These developments showcase the company’s ongoing dedication to pushing AI capabilities to new heights.
OpenAI CEO Sam Altman has also been in talks to acquire a chip builder or find ways to enhance the company’s access to expensive AI chips, which are essential for their tools. These efforts demonstrate OpenAI’s commitment to improving its infrastructure and furthering its AI research and development.
This recent deal represents a significant milestone for OpenAI. It comes on the heels of a brief period of turmoil in late 2023 when Altman was fired by the company’s board, only to be rehired following employee outrage. The substantial investments in OpenAI have not gone unnoticed by regulators either. European Commission officials have expressed concerns over whether Microsoft’s backing of the company raises antitrust issues. Additionally, the Federal Trade Commission in the US announced an investigation into whether investments from Microsoft, Google, and Amazon into AI companies like OpenAI harm competition.
The valuation of OpenAI at $80 billion highlights the increasing importance and potential of artificial intelligence. As companies continue to invest in AI research and development, we can expect to see significant advancements and innovations in the field. OpenAI’s impressive backing and ongoing projects position it as a leading player in the AI landscape.
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