OpenAI Negotiates $100 Billion Valuation Amid Funding Talks

OpenAI’s Ambitious Valuation Talks

OpenAI is currently in negotiations to finalize a funding deal that could elevate the company’s valuation to an impressive $100 billion or more. This marks a significant increase of approximately $20 billion from its valuation just eight months ago, as reported by two individuals familiar with the discussions.

The forthcoming funding round is expected to be spearheaded by Thrive Capital, which is poised to invest around $1 billion into the San Francisco-based company. According to the sources, who requested anonymity, there is a possibility that Microsoft will also participate in this investment.

Since its launch of the groundbreaking AI chatbot ChatGPT in late 2022, OpenAI has been at the forefront of the artificial intelligence revolution, catalyzing a wave of investment in AI startups. However, enthusiasm among investors has waned in recent months, particularly as several notable startups have been absorbed by larger tech conglomerates such as Google and Amazon.

Despite this cooling sentiment, OpenAI continues to be a dominant player in the artificial intelligence landscape. The company is one of the few that combines a team of seasoned researchers with substantial financial resources, enabling it to work on complex and resource-intensive AI systems.

Since the debut of ChatGPT, OpenAI has developed increasingly sophisticated technologies, including advanced iterations of its chatbot that can produce images and generate human-like speech.

At the beginning of 2023, Microsoft made a substantial investment of $10 billion in OpenAI, raising its total investment in the company to $13 billion. A year later, Thrive Capital led another funding round that valued OpenAI at over $80 billion. This previous deal did not involve the issuance of new shares but allowed existing employees to sell their shares.

The anticipated new investment, which was initially reported by both Bloomberg News and The Wall Street Journal, will also provide an opportunity for other current shareholders to sell their stakes.

OpenAI refrained from making any comments regarding the ongoing discussions.

In a notable legal context, The New York Times filed a lawsuit against both OpenAI and Microsoft in December, alleging copyright infringement concerning news content utilized in relation to AI systems.

The current investment discussions come on the heels of a tumultuous yet rapidly evolving year for the San Francisco startup. In November, a dramatic turn of events unfolded when four members of the OpenAI board voted to oust Sam Altman, the company’s chief executive, citing a lack of confidence in his ability to lead the development of safe AI technology. However, Mr. Altman was reinstated just five days later. Since this incident, the board has expanded, mirroring the growth of the company’s workforce.