Currently engaged in preliminary negotiations, OpenAI, endorsed by Microsoft Corp, is exploring a new funding round potentially valuing the firm at or beyond the US$100-billion mark. This development, as disclosed by informed sources requesting anonymity, positions the ChatGPT developer as a top-tier player among the globe’s elite start-ups.
The South China Morning Post reported on Sunday, December 24, 2023, that Microsoft Corp’s support is instrumental in these early-stage financial discussions. The exact details, including terms and timelines, are yet to be finalized, indicating the dynamic nature of this potential financial milestone.
Those privy to the discussions, preferring to remain unnamed due to the confidential nature of these talks, revealed that this funding initiative could propel OpenAI to the second highest valuation among U.S. start-ups, trailing only Space Exploration Technologies Corp, led by Elon Musk. This information aligns with insights from CB Insights.
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OpenAI has reserved comments on the matter.
Based in San Francisco, California, OpenAI is also nearing the completion of a distinct tender offer scheduled for early January. This offer would enable employees to sell shares at an estimated US$86 billion valuation, as previously reported by Bloomberg. This offer, led by Thrive Capital, has witnessed a surge in investor interest, surpassing available shares, as shared by those familiar with the situation.
The company’s soaring valuation is a direct result of the AI boom it initiated a year ago with the release of ChatGPT, a chatbot known for generating human-like text and poetry. Having raised US$13 billion, primarily from Microsoft, OpenAI has catalyzed a renewed interest in AI’s potential, significantly influencing the tech industry’s trajectory.
This AI enthusiasm has also triggered substantial investments by Amazon.com and Google’s parent company, Alphabet, in OpenAI competitor Anthropic. Similarly, Salesforce’s investment in Hugging Face, valuing it at US$4.5 billion, and Nvidia Corp’s multiple investments in AI-related ventures highlight the sector’s growth.
OpenAI has reportedly been in talks about a semiconductor venture with Abu Dhabi’s G42. While details remain undisclosed, the venture aims to challenge Nvidia’s dominance in the AI chip market, as reported by Bloomberg News.
In October, a partnership between G42 and OpenAI was announced to bring advanced AI solutions to the UAE and surrounding regions. G42, established in 2018 and led by Sheikh Tahnoon bin Zayed Al Nahyan, has not released financial specifics of this collaboration.
OpenAI’s trajectory faced a brief period of uncertainty following the unexpected dismissal of CEO Sam Altman. However, after a brief leadership crisis, Altman returned with a restructured board, reaffirming the company’s commitment to product development and customer focus.
Photo: Bloomberg (Sam Altman, chief executive of OpenAI, at the Hope Global Forums annual meeting in Atlanta, Georgia on December 11, 2023. Photo: Bloomberg alt=Sam Altman, chief executive of OpenAI, at the Hope Global Forums annual meeting in Atlanta, Georgia on December 11, 2023.)
