OpenAI, the parent company of ChatGPT, is reportedly in discussions for a share sale that could potentially value the company at $80 billion to $90 billion, according to sources cited by the Wall Street Journal. This would position OpenAI among the world's top startups in terms of valuation.
Rather than issuing new shares to raise capital, the proposed deal would involve employees selling their existing shares to investors. This approach would allow OpenAI to generate funds without diluting ownership.
This potential valuation range represents a significant increase from earlier this year when Microsoft invested billions of dollars in OpenAI, valuing the company at approximately $30 billion. Microsoft currently holds a 49% stake in OpenAI and is not expected to participate in any financing rounds that would increase its ownership beyond 50%.
OpenAI CEO Sam Altman has previously stated that the company has no plans to go public or put itself up for sale. However, the company still needs to cover the substantial costs associated with running its generative AI technology. OpenAI is reportedly seeking to sell "a few hundred million dollars worth" of existing shares to Silicon Valley investors to address these expenses.
If the deal goes through, OpenAI would become one of the most highly valued global startups, trailing only ByteDance, the parent company of TikTok, and Elon Musk's SpaceX. OpenAI has projected substantial growth, with expectations to reach $1 billion in revenue this year and generate billions more in 2024.
While OpenAI has seen success with its advanced version of ChatGPT, GPT-4, and by licensing its language models to businesses, it faces competition from tech giants such as Google and Meta, as well as other companies developing rival AI models. Recently, Amazon invested $4 billion in Anthropic, a competitor to ChatGPT.
OpenAI's potential share sale represents a significant milestone for the company and could further solidify its position as a leading player in the AI industry.