According to a report by The Wall Street Journal, Microsoft-backed OpenAI is preparing to raise at least a billion dollars in a new funding round, which would value the artificial intelligence company at just north of $100 billion.
Sam Altman's chatbot startup company, established eight years ago as a competitor to Google's DeepMind, plans to receive $1 billion from venture capital firm Thrive Capital in a new funding round. This would mark the largest funding round of outside capital since Microsoft plowed $10 billion into the chatbot startup in January 2023.
Earlier this year, OpenAI finalized a deal to sell existing shares through a tender offer spearheaded by Thrive. This arrangement allowed employees to sell shares at a valuation of around $80 billion, up from $29 billion one year ago.
Here's more from WSJ:
"For now, though, AI is a speculative business that isn't generating nearly as much revenue as investors and tech companies are putting into it. Earlier this year, OpenAI's revenue was $3.4 billion on an annualized basis, according to a person familiar with the matter. The Information earlier reported on OpenAI's revenue."
WSJ noted:
"It couldn't be determined what other investors are participating in the new funding round."
Besides Thrive, past OpenAI deals have included Sequoia Capital, Andreessen Horowitz, and K2 Global.
WSJ obtained a document indicating that OpenAI stockholders have been negotiating to sell their shares in recent weeks at a price that would value the company at $103 billion.
Microsoft has a 49% share of OpenAI's profit after plowing $13 billion into the chatbot company since 2019.
News of the funding round from WSJ comes about a month after OpenAI revealed it's testing SearchGPT: a combination of AI tech and real-time search data that allows users to search the internet with ChatGPT.
It appears that Altman may have sold off some shares...
