OpenAI, the influential artificial intelligence (AI) startup recognized for its creation of ChatGPT, is reportedly in discussions with potential investors regarding a significant share sale at a substantially elevated valuation compared to just a few months ago. Sources familiar with the matter have disclosed this development.
The proposed transaction could place a valuation on OpenAI, which counts Microsoft among its backers, in the range of US$80 billion to US$90 billion. The Wall Street Journal initially broke the news regarding this potential share sale. If realized, this valuation would catapult OpenAI into the ranks of the world’s most valuable private companies, a remarkable feat that mirrors the growing enthusiasm for AI startups, especially following the debut of ChatGPT last year.
ChatGPT, celebrated for its ability to generate human-like responses based on user inputs, has played a pivotal role in fueling the popularity of AI technology. The AI sector, hailed as the next frontier in technology, has become a focal point of interest in Silicon Valley.
Should the share sale materialize, it would mark the second significant secondary share offering by the prominent San Francisco-based startup, signifying a remarkable surge in valuation. Earlier this year, OpenAI conducted a share sale amounting to US$300 million, which valued the company at US$30 billion.
The strategy of conducting private share sales without going public is not new in the tech industry. This approach allows established startups like SpaceX, among others, to provide opportunities for employees and existing investors to realize the increasing value of their equity in the company. In these transactions, the company itself does not raise fresh capital.
OpenAI, in addition to the potential share sale, recently secured primary funding of US$10 billion from Microsoft. These funds are earmarked for the development of new products and the support of AI model training initiatives, underscoring the company’s commitment to advancing the field of artificial intelligence.
