OpenAI, the trailblazing force behind ChatGPT and a frontrunner in artificial intelligence innovation, is reportedly in the early stages of discussions to secure a new round of funding at a valuation potentially surpassing $100 billion.
Fortune reported that sources familiar with the matter revealed that talks involving potential investors have commenced, marking a potential milestone that would solidify OpenAI’s position among the world’s most valuable startups.
While the specifics—such as the terms, valuation, and exact timing of this funding round—are yet to be finalized and may undergo changes, the prospect of such a substantial financial boost marks the tremendous growth and potential of the AI powerhouse.
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If this funding comes to fruition as anticipated, it would firmly position OpenAI as the second-most valuable startup in the United States, following only Elon Musk’s Space Exploration Technologies Corp., according to data from CBInsights.
OpenAI refrained from providing comments on the ongoing discussions.
The company is concurrently navigating a separate tender offer set to conclude in early January. This offer allows employees to trade their shares at a valuation pegged at $86 billion—a process led by Thrive Capital. Sources close to the matter noted that there is overwhelming investor demand for this opportunity, indicating heightened interest in OpenAI.
The surge in OpenAI’s valuation mirrors the fervor ignited by the release of ChatGPT a year ago. This innovative chatbot, capable of crafting remarkably human-like responses and even poetry, propelled OpenAI into Silicon Valley’s elite echelons. The company’s exponential growth and promise in AI sparked a significant shift in the tech industry, attracting substantial investments, including a $13 billion investment from Microsoft Corp.
However, the competition and investment in artificial intelligence have witnessed significant activity beyond OpenAI. Companies like Amazon.com Inc. and Alphabet Inc. have channeled substantial investments into Anthropic, a notable rival of OpenAI. Also, Salesforce Inc. took the lead in an investment round involving Hugging Face, a company valued at $4.5 billion.
Nvidia Corp., renowned for producing semiconductors that power AI tasks, made noteworthy strides in investment strategy in 2023. The company disclosed its involvement in over two dozen investments throughout the year, demonstrating a commitment to diversify and expand its foothold in the AI industry beyond hardware production.
Simultaneously, OpenAI has explored avenues for funding a new venture in chipmaking, engaging in discussions with Abu Dhabi-based G42. Reports suggest discussions for a substantial funding round—potentially between $8 billion and $10 billion—for this chip venture, dubbed “Tigris.” The primary goal of this venture is to develop semiconductors capable of rivaling those produced by Nvidia, a prominent force in the AI chip market. This move aligns with OpenAI’s ambition to diversify and innovate in various AI-related domains.
OpenAI’s strategic collaborations, including the partnership with G42, announced in October, underscore the company’s global ambitions and pursuit of pioneering advancements in AI technology. Despite recent leadership changes, including the temporary removal and subsequent reinstatement of CEO Sam Altman, OpenAI has reasserted its commitment to refocusing on product development and innovation.
The influx of investments by these tech giants into competing or complementary ventures underlines the intense competition and race for dominance in the evolving AI market. It also reflects the growing importance of AI across various industries, spurring heightened interest and substantial financial backing from major players aiming to solidify their positions in this dynamic and transformative field.