OpenAI is reportedly in initial talks to secure additional funding in a new investment round. Sources familiar with the situation suggest that this funding could value the ChatGPT creator at $100 billion or higher, solidifying its position as one of the most valuable startups globally. The person who asked not to be named in order to discuss private affairs said that investors who might be engaged in the fundraising round had been included in preliminary negotiations. As per sources, various elements of the funding round, including terms, valuation, and timing, remain undecided and are subject to potential alterations.
Based on statistics from CBInsights, if the investment round proceeds as expected, Elon Musk’s Space Exploration Technologies would be the most valued startup in the US, surpassing the artificial intelligence darling.
OpenAI opted not to respond.
According to a recent report by Bloomberg, the business is scheduled to conclude a secondary tender offer in early January, enabling its employees to sell their shares at a valuation of $86 billion. Thrive Capital is spearheading the effort, and insiders familiar with the matter indicate that investor demand outweighed the available supply.
The artificial intelligence craze that OpenAI sparked a year ago with the release of ChatGPT—a chatbot that could write astonishingly human phrases and even poetry—and its skyrocketing valuation are related. Within a few months, the business transformed the tech industry landscape by becoming Silicon Valley’s hottest startup and receiving $13 billion to date from Microsoft. This led to a renewed appreciation for the promise of artificial intelligence.
Since then, billions of dollars have been invested by Alphabet and Amazon.com in OpenAI competitor Anthropic. When Salesforce acquired Hugging Face, its value was $4.5 billion. Earlier this month, Nvidia, a manufacturer of many of the transistors used in AI operations, announced that it had made more than two dozen investments in 2023.
According to people with knowledge of the situation, OpenAI has also had negotiations with G42, based in Abu Dhabi, to seek money for a new chip business.
Those who sought anonymity to discuss sensitive material indicated that the firm has talked about funding between $8 billion and $10 billion from G42. It’s unclear how the company’s broader financial efforts and the chip endeavor are connected.
Sam Altman, the chief executive officer of OpenAI, had been looking for funding for the Tigris chip project. The goal is to produce semiconductors that can compete with Nvidia, which currently dominates the AI chip market, as Bloomberg News reported last month.
G42 and OpenAI announced their collaboration in October with the goal of “delivering cutting-edge AI solutions to the UAE and regional markets.” There was no financial data given. The national security adviser and chair of the Abu Dhabi Investment Authority for the United Arab Emirates, Sheikh Tahnoon bin Zayed Al Nahyan, is in charge of the 2018-founded company.
The future of the company appeared momentarily uncertain after Altman’s abrupt dismissal by OpenAI’s board earlier this month. Several investors thought about writing down their stakes to zero at the time. However, following five days of turmoil in the leadership, Altman was reinstated and a new board was appointed. The company wants to convey to its clientele that, in the wake of the disruption, it is focused on its products.