Topline
OpenAI, the artificial intelligence company that created ChatGPT, is in discussions about a potential share sale that would value it at $80 to $90 billion, according to the Wall Street Journal—about three times what it was valued in January, as the AI race heats up.
OpenAI is reportedly in discussions about a share sale that would value it at $80 to $90 billion. … [+]
Key Facts
It’s expected that the deal will let employees sell their shares, instead of OpenAI issuing new ones, the Journal reported, citing multiple unnamed sources.
A valuation of $80 or $90 billion would make OpenAI—which is privately held—one of the highest valued startups, joining the ranks of TikTok owner ByteDance and SpaceX and surpassing companies like Shein and Canva.
OpenAI is positioned to earn more than $1 billion in revenue over the next year by selling access to a higher-quality version of ChatGPT and the technology behind it, Reuters reported last month.
Tangent
OpenAI is backed largely by Microsoft, which owns 49% of the company, according to the Journal. Microsoft expanded its investment earlier this year when it put billions more into OpenAI, and it has begun integrating the company’s AI technology into its Bing search engine in a bid to compete with Google.
Key Background
ChatGPT—OpenAI’s chief product—launched last November and quickly became one of the most popular artificial intelligence programs. Within a week of its launch, the program attracted one million signed-up users who were able to use it for free while the product was in a “research preview” phase. People can still use ChatGPT for free, but OpenAI also offers ChatGPT+ for a $20 per month subscription fee. Beyond normal access to ChatGPT, subscribers get faster response times, are able to use the service even during peak times and get priority access to new features, according to its website.
What To Watch For
OpenAI backer Microsoft isn’t the only major tech company to invest in artificial intelligence. Google launched its Bard AI chatbot earlier this year, and has begun integrating it into services like Gmail and YouTube, while Amazon announced a $4 billion investment in AI startup Anthropic on Monday.
Further Reading
Source: https://www.forbes.com/sites/mollybohannon/2023/09/26/openai-could-reach-massive-90-billion-valuation-with-new-share-sales-report-says/