Discussing a possible $100 billion valuation for new finance, OpenAI is in the midst of negotiations
OpenAI rumors include new investment and a semiconductor venture.
Sources told Bloomberg Friday that OpenAI is in early talks for $100 billion in financing.
The article stated investment round conditions, valuation, and timing may vary.
The report claims OpenAI and Abu Dhabi-based G42 have discussed sponsoring a semiconductor firm. The semiconductor venture and corporate finance may be linked, the newspaper reported. OpenAI may raise $8–10 billion from G42. The publication reported that OpenAI personnel would sell shares at $86 billion in an early January Thrive Capital tender offer.
Microsoft will spend over $10 billion on OpenAI, which started the generative AI craze with ChatGPT in November 2022.
MS told Reuters it has nothing to disclose. OpenAI denied Reuters’ request for comment.ChatGPT, a chatbot that mimics human reactions, has increased AI appeal and OpenAI’s worth in San Francisco. Previously, it sold $300 million shares for $30 billion.
Microsoft will join OpenAI’s board as an observer, CEO Sam Altman revealed in late November. Altman was sacked without explanation by OpenAI on Nov. 17, shocking investors and personnel. His reinstatement four days later promised a new board. OpenAI is in early talks to raise $100 billion, making it one of the world’s most valuable companies, insiders say. The anonymous sources stated investors in the fundraising round have been in preliminary talks. The people said the investment deal’s parameters, valuation, and timing may change. According to CBInsights, the AI darling would become the second-most valuable US business after Elon Musk’s Space Exploration Technologies Corp. if the investment round goes through.
OpenAI rejected the comment
Bloomberg stated that a separate tender offer in early January will allow employees to sell their shares at $86 billion. That is led by Thrive Capital and had more investor demand than supply, sources added.
OpenAI’s high valuation reflects the AI craze it started a year ago with ChatGPT, a chatbot that can write astonishingly human phrases and poetry in response to simple inputs. The business became Silicon Valley’s hottest startup, raising $13 billion from Microsoft Corp., and sparked a new appreciation for AI that altered the tech sector within months.
Since then, Amazon and Alphabet have invested billions in OpenAI rival Anthropic. Salesforce Inc. invested $4.5 billion in Hugging Face, while Nvidia Corp., which makes numerous AI components, announced earlier this month that it made more than two dozen investments in 2023.
OpenAI has also discussed investing in a new chip business with Abu Dhabi-based G42, according to sources.
One person, who asked for anonymity to disclose secret information, claimed the firm had explored raising $8 billion to $10 billion from G42. Whether the chips endeavor and corporate investment are related is unclear. Sam Altman, CEO of OpenAI, sought funding for Tigris, a chipmaking initiative. The goal is to build semiconductors that can compete with Nvidia, which dominates the AI chip industry, Bloomberg News reported last month.
Read on: Altman Wanted Billions For Chip Venture Before OpenAI Ouster
G42 partnered with OpenAI in October “to deliver cutting-edge AI solutions to the UAE and regional markets.” No financial information was given. Sheikh Tahnoon bin Zayed Al Nahyan, UAE national security adviser, and Abu Dhabi Investment Authority chair leads the 2018-founded enterprise.
After the board abruptly ousted Altman last month, OpenAI’s future was still being determined. At the moment, some investors pondered selling altogether. After five days of leadership turmoil, Altman returned and a new board was appointed. The corporation has tried to show customers that it’s refocusing on its products after the disruption.
