Thrive Capital leads deal valuing OpenAI at over $80bn. CEO Sam Altman seeks to boost AI capabilities through potential chip maker acquisition.
According to the New York Times, Microsoft-backed artificial intelligence company OpenAI has finalized a deal valuing it at over $80 billion.
The arrangement, spearheaded by venture firm Thrive Capital, offers existing OpenAI shareholders the opportunity to sell their shares, as reported. This enables employees to liquidate their shares instead of seeking capital through a traditional funding round.
OpenAI previously engaged in a comparable transaction in early 2023, accepting a tender offer from four venture capital firms: Thrive Capital, Sequoia Capital, Andreessen Horowitz, and K2 Global. This earlier deal valued OpenAI at approximately $29 billion, according to the report.
Furthermore, Microsoft has made significant investments in OpenAI, injecting $10 billion into the company in January 2023, along with previous funding rounds in 2019 and 2021.
Contextual Information
Founded in 2015, OpenAI has garnered significant investments from various tech firms and investors by the end of 2023. Microsoft’s investment totaled $13 billion, with the company stating it doesn’t hold ownership but is entitled to profit shares. In April, Thrive, Sequoia Capital, Andreessen Horowitz, and K2 Global acquired new shares, raising OpenAI’s valuation to approximately $27 billion. CEO Sam Altman, briefly ousted and reinstated amidst internal turmoil, has indicated no plans for an immediate IPO.
What are OpenAI and ChatGPT?
OpenAI leads AI innovation and has sparked interest with its products.
ChatGPT, a popular AI tool for chatting, was introduced in late 2022. Its success has encouraged other companies like Microsoft to adopt AI in their services, such as integrating it into Bing search and developing their own AI products.
What does Sora refer to?
OpenAI unveiled a new tool named Sora on Thursday, capable of generating videos based on text input. Additionally, the company revealed it was experimenting with a memory-enhancement feature for ChatGPT, enabling it to better recall past conversations.
CEO Sam Altman is exploring avenues to bolster the company’s AI capabilities, considering acquiring a chip manufacturer or securing greater access to expensive AI chips that drive its products.
After a short-lived crisis in late 2023, Altman was temporarily removed by the board but later reinstated due to employee backlash.
In early January, European Commission officials announced they would scrutinize Microsoft’s support of OpenAI for potential competition concerns.
On January 24, the US Federal Trade Commission revealed an investigation into whether investments from tech giants like Microsoft, Google, and Amazon in AI firms, including OpenAI, pose antitrust issues.
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