ChatGPT’s Appeal Boosts OpenAI’s Value To $29 Billion

Posted by

According to a report from The Wall Street Journal, research study laboratory OpenAI, the designer of ChatGPT, is considering a tender offer that would value the business at around $29 billion.

The deal would involve purchasing a specified variety of shares from existing shareholders at a fixed price and would roughly double OpenAI’s valuation from a previous tender offer completed in 2021, when the business was valued at around $14 billion.

The deal is reportedly being negotiated with venture capital firms Flourish Capital and Founders Fund. If it goes through it would make OpenAI one of the most important startups in the United States.

The significant increase in the company’s value is likely due in part to the prevalent appeal of ChatGPT, which gained over a million users within the very first 5 days of being provided to the general public.

Given that OpenAI’s most popular item is used free of charge, it might appear surprising that the business is valued so highly.

OpenAI creates millions in income by offering its AI software to developers. OpenAI is currently providing cloud services to Microsoft for tools that allow users to create text, code, and imagery utilizing easy instructions.

Additionally, as a research company, OpenAI is funded through a combination of contributions, sponsorships, and grants.

A few of the sources of funding for OpenAI consist of companies like Microsoft and individual philanthropists such as Elon Musk and Sam Altman.

In 2019, Microsoft invested $1 billion in OpenAI, and the company has been talking about the possibility of making a much bigger financial investment in the AI service, possibly worth 10s of billions of dollars.

With further financial investment, OpenAI can work on incorporating its AI innovation with other Microsoft products.

Today, it was reported that Microsoft plans to integrate AI innovation from OpenAI’s ChatGPT chatbot into its Bing online search engine.

See: Microsoft Bing With ChatGPT Reportedly Introducing In March

ChatGPT integration will permit Bing to provide complete sentences in response to browse queries instead of lists of links.

The upgraded search function is anticipated to be available by the end of March and can potentially provide Microsoft a benefit over Google.

The tender deal has not yet been settled, and the terms could change. OpenAI decreased to comment on The Wall Street Journal’s report.