OpenAI is currently engaged in preliminary discussions to secure a fresh round of funding, with insiders revealing a potential valuation equal to or surpassing $100 billion. Such an agreement would solidify the position of the creator of ChatGPT as one of the most esteemed startups globally. Individuals privy to these deliberations, who wish to remain anonymous due to the confidential nature of the matter, assert that prospective investors have been part of the initial talks. It is important to note that the specifics, encompassing terms, valuation, and the timeline of the funding round, are yet to be conclusively determined and remain subject to potential alterations.
If the fundraising endeavor unfolds according to the current plans, OpenAI would ascend to the status of the second-most valuable startup in the United States. This would position it just behind Elon Musk’s Space Exploration Technologies, according to data sourced from CBInsights.
OpenAI has chosen to abstain from commenting on the matter.
The company is concurrently poised to finalize a distinct tender offer in early January, facilitating employees in divesting their shares at an estimated valuation of $86 billion. Spearheaded by Thrive Capital, this initiative has reportedly encountered more investor demand than available shares, as disclosed by individuals familiar with the situation.
The soaring valuation of OpenAI mirrors the artificial intelligence fervor initiated a year ago with the introduction of ChatGPT. This advanced chatbot, capable of crafting remarkably human-like sentences and even poetry in response to basic prompts, catapulted the company to become the most sought-after startup in Silicon Valley. To date, OpenAI has successfully raised $13 billion in investments, primarily from Microsoft. This surge in interest has underscored the transformative potential of AI, reshaping the technological landscape in a matter of months.
In response to OpenAI’s success, major players such as Amazon.com and Alphabet have poured substantial investments into Anthropic, a rival AI entity. Salesforce led an investment drive into Hugging Face, valuing the company at $4.5 billion. Additionally, Nvidia, a significant player in AI-related semiconductors, has disclosed over two dozen investments made in 2023.
In a separate development, OpenAI has engaged in discussions regarding funding for a new chip venture with G42, based in Abu Dhabi, as disclosed by individuals familiar with the situation. This initiative is purportedly seeking to raise between $8 billion and $10 billion from G42. The venture, known by the codename Tigris, aims to develop semiconductors capable of competing with those currently dominating the AI chip market, particularly those produced by Nvidia.
Notably, G42 had previously announced a collaboration with OpenAI in October to deliver cutting-edge AI solutions to the UAE and regional markets, without divulging financial specifics. G42, founded in 2018, is under the leadership of Sheikh Tahnoon bin Zayed Al Nahyan, the UAE’s national security adviser and chair of the Abu Dhabi Investment Authority.
OpenAI encountered a brief period of uncertainty when its CEO, Sam Altman, was unexpectedly removed by the board last month. Some investors contemplated writing down their stakes to zero during this tumultuous period. However, after five days of leadership upheaval, Altman was reinstated, and a new board was appointed. The company has since aimed to reassure its customers of its renewed focus on product development in the aftermath of these events.
© 2023 Bloomberg L.P.