According to the Wall Street Journal , citing people familiar with the matter, OpenAI is discussing stock sales with investors . The artificial intelligence startup behind ChatGPT will be valued at between $80 billion and $90 billion, roughly three times its level earlier this year.
In April this year, OpenAI received just over $300 million in financing from backers including Sequoia Capital, Andreessen Horowitz, Thrive, and K2 Global, valuing it at $29 billion.
The startup, 49% owned by Microsoft, has told investors it expects to hit $1 billion in revenue this year and generate billions more in 2024, people familiar with the matter said. The deal is expected to allow employees to sell existing shares rather than the company issuing new shares to raise additional capital. OpenAI representatives have begun pitching investors on the deal, though terms could change, people familiar with the matter said.
A valuation of $80 billion or more would make OpenAI one of the most highly valued startups in the world, behind only Elon Musk's SpaceX and TikTok parent ByteDance. The number underscores the extent to which OpenAI can reshape Silicon Valley's landscape and force wealthier, more established tech giants to overhaul their product roadmaps to emulate OpenAI's practice.
OpenAI aims to sell hundreds of millions of dollars worth of existing stock to Silicon Valley investors in a deal that would immediately generate huge paper profits for Microsoft.
The employee-owned sale could set a floor for raising more money from outside investors. OpenAI is widely expected to raise more money by issuing new shares to meet the computing costs needed to develop and maintain its artificial intelligence systems.
The company has attracted strong interest from investment giants such as Masayoshi Son’s SoftBank, people familiar with the matter said . The capital raise will involve the sale of new shares and is separate from the tender offer process currently underway. It also stated that OpenAI intends for Microsoft to hold a minority stake in the company, which means that the technology giant is likely to be unable to purchase shares in any financing, thereby increasing its shareholding ratio to more than 50%.
OpenAI did not respond to a request for comment.