Topline
OpenAI—the artificial intelligence company behind the viral ChatGPT chatbot program—is in discussions to sell shares valuing the firm at $29 billion, according to the Wall Street Journal, after the launch of ChatGPT was lauded by many as a revolutionary advance in artificial intelligence despite some problems.
OpenAI logo seen on screen with ChatGPT website displayed on mobile seen in this illustration in … [+]
Key Facts
The Founders Fund and Thrive Capital venture capital firms are reportedly in talks to buy at least $300 million in shares.
The deal would more than double a 2021 tender offer for shares that valued the company at around $14 billion, according to the Journal.
OpenAI is not publicly traded, but many of the shares could reportedly be purchased from shareholders like employees.
OpenAI declined to comment or confirm the report.
What To Watch For
The valuation appears very bullish on the company’s future ability to churn out revolutionary products that are able to generate profits, since Reuters reported last month the company only expected to make about $80 million in revenue for 2022. OpenAI has reportedly been telling investors it expects to increase its annual revenue to $1 billion by 2024.
Key Background
ChatGPT launched on November 30, and quickly gained popularity for its ability to mimic human conversation and provide detailed responses to user prompts. Within a week of its launch, the program attracted a million signed-up users who—for now—are able to use it for free, since ChatGPT remains in a “research preview” phase. OpenAI has also launched similar products like DALL-E 2, which generates images based on text input. Microsoft in 2019 invested $1 billion in OpenAI, and is hoping to integrate ChatGPT software with its Bing search engine to drive traffic away from Google, according to Bloomberg. Microsoft is also actively in talks to increase its investment stake, according to the Journal.
Contra
ChatGPT has faced several issues, such as giving incorrect answers and repeating similar phrases. The chatbot so far appears more successful than earlier programs launched by big tech firms, like Meta’s BlenderBot 3, which was released in August but quickly adopted racist and antisemitic language while falsely claiming former President Donald Trump won the 2020 election.
Further Reading
ChatGPT Creator Is in Talks for Tender Offer That Would Value It at $29 Billion (Wall Street Journal)
Here’s What To Know About OpenAI’s ChatGPT—What It’s Disrupting And How To Use It (Forbes)
Source: https://www.forbes.com/sites/nicholasreimann/2023/01/05/chatgpt-creator-openai-discussing-offer-valuing-company-at-29-billion-report-says/