ChatGPT Creator is in investor talks at a valuation of $29 billion

OpenAI, the research lab behind the virus Chatbot ChatGPTis in talks to sell existing shares in a tender offer that would value the company at about $29 billion, according to people familiar with the matter, making it one of the most valuable stocks in the world. American emerging companies On paper though it made little revenue.

People said venture capital firms Thrive Capital and Founders Fund were in talks to buy shares. They said the bid could amount to at least $300 million in sales of OpenAI shares. People said the deal is structured like a tender offer, with investors buying shares from existing shareholders such as employees.

The Wall Street Journal reported that the new deal would nearly double OpenAI’s valuation from a previous tender bid completed in 2021, when OpenAI was valued at $14 billion. OpenAI has generated tens of millions of dollars in revenue, in part from selling its AI software to developers, but some investors have expressed skepticism that the company can generate meaningful revenue from the technology.

People said no final agreement had been reached and the terms could be changed. OpenAI declined to comment.

OpenAI released a series of AI-based products last year that attracted the public’s attention, including Dall-E 2 image generation software and chatbot ChatGPT. If the bid takes place at this valuation, OpenAI will be one of the few startups able to raise funds at higher valuations in the private market, as Investors pulled out A new deal given the trajectory of technology last year.

Microsoft corp.

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Advanced talks have also taken place to increase its investment in OpenAIThe magazine reported. in 2019, Microsoft invested $1 billion in OpenAI and became its partner of choice to commercialize new technologies for services such as Bing and Microsoft Design.

ChatGPT, OpenAI’s new artificial intelligence chatbot, can write articles on complex topics. WSJ’s Joanna Stern returns to AP Literature High School for a day to see if she can pass the class using only AI. Photo illustration: Elena Scotti

OpenAI, led by technology investor Sam Altman, was founded as a non-profit organization in 2015 with the goal of pursuing AI research for the benefit of humanity. Her initial backers included

Tesla company

chief executive officer

Elon MuskReed Hoffman, co-founder of LinkedIn, and Mr. Altman.

Under Mr. Altman, OpenAI set up a for-profit arm in 2019 so it could more easily raise money to fund the computing power needed to train its algorithms. It took a faster approach to bringing AI models to the public than the big competitors

the alphabet company

Google, which has been slower to announce its technology in part because of ethical concerns.

ChatGPT, the chatbot where users get intelligent responses to queries like “describe a discussion between two college students about the value of a liberal arts education,” surpassed 1 million users just days after its launch on November 30, according to a tweet from Mr. Altman. Some industry observers have hailed the tool as a major technical breakthrough and a potential replacement for current search engines down the road, though Mr. Altman has acknowledged that the program’s output often contains factual errors.

OpenAI hopes one day to achieve what AI researchers call “artificial general intelligence,” or technology that can fully reflect the intelligence and capabilities of humans. In an interview with the magazine in December, Mr. Altman said OpenAI tools could transform technology similar to the invention of the smartphone and tackle larger scientific challenges.

Mr. Altman said at the time that OpenAI had no plans to acquire or go public, meaning investors would likely only be able to cash out through secondary stock sales.

The newspaper reported that Mr. Altman recently told investors that the company would soon be able to generate up to $1 billion in annual revenue in part by charging consumers and businesses for its products.

Previous investors in OpenAI include Khosla Ventures and hedge fund Tiger Global Management, according to people familiar with the matter.

The company has capped profits for some venture investors at about 20 times their investment, with the ability to earn greater returns the longer they wait to sell their shares, the paper previously reported. OpenAI said such cap investment structures were necessary to ensure that value from OpenAI returns not only to investors and employees, but also to humanity in general.

Write to Berber Jin at [email protected] and Miles Kruppa at [email protected]

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