OpenAI is reportedly in talks with investors to sell them shares held by the company’s employees in a transaction that could boost its valuation up to $90 billion.
The rumour was first reported by The Wall Street Journal on Tuesday. The rumoured deal means that instead of issuing new shares, which would dilute equity, OpenAI would let staff sell their shares. Employees that chose to do so would get a nice payday. Investors would get a chunk of a very promising company. And OpenAI would get some interesting new stakeholders that could help it in other ways.
Financial details of the potential deal were not disclosed, although the move could see the AI startup’s valuation reach $80 billion to $90 billion. OpenAI reportedly sold $300 million worth of shares at a $30 billion valuation earlier this year, making that deal look like a bargain.
Microsoft holds a 49 percent stake after investing $10 billion into the company earlier this year. As part of the deal, OpenAI pledged to partner and integrate its AI software with Microsoft’s products in return for Redmond’s computational resources to train and run its models.
If the trade plan to sell employee shares follows through, Microsoft will no doubt make a significant profit on its investments.
Founded in 2015, OpenAI was initially a non-profit research lab focused on developing artificial general intelligence. That all changed under CEO Sam Altman, a well-known figure in Silicon Valley who previously led top startup accelerator Y Combinator.
OpenAI transformed to a for-profit business and launched its first commercial product, GPT-3, a large language model capable of generating text given an input prompt in 2020.
Fast forward three years, and AI has rapidly progressed. OpenAI is a leader in generative AI technology, releasing tools like its text-to-image tool DALL·E or speech-to-text software Whisper. Its most popular offering is ChatGPT. Subscribers and enterprise customers using the paid version of the chatty tool gain access to its latest GPT-4 model, which improves ChatGPT’s output.
On Monday, OpenAI announced updates to ChatGPT that will allow users to interact with its chatbot using audio and images.
The Register has asked OpenAI for comment. ®
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- Source: https://go.theregister.com/feed/www.theregister.com/2023/09/26/openai_90bn_valuation/
