According to a report from The Wall Street Journal, research lab OpenAI, the designer of ChatGPT, is thinking about a tender offer that would value the business at around $29 billion.
The deal would include acquiring a defined variety of shares from existing investors at a fixed cost and would approximately double OpenAI’s valuation from a previous tender deal completed in 2021, when the company was valued at around $14 billion.
The offer is reportedly being worked out with venture capital companies Flourish Capital and Founders Fund. If it goes through it would make OpenAI among the most important startups in the United States.
The substantial boost in the business’s worth is likely due in part to the prevalent popularity of ChatGPT, which gained over a million users within the first five days of being made available to the public.
Given that OpenAI’s most popular product is offered free of charge, it may appear surprising that the business is valued so extremely.
OpenAI generates millions in earnings by offering its AI software to developers. OpenAI is presently supplying cloud services to Microsoft for tools that permit users to create text, code, and images using easy guidelines.
In addition, as a research company, OpenAI is moneyed through a combination of donations, sponsorships, and grants.
Some of the sources of financing for OpenAI include business like Microsoft and private philanthropists such as Elon Musk and Sam Altman.
In 2019, Microsoft invested $1 billion in OpenAI, and the business has actually been going over the possibility of making a much larger financial investment in the AI business, potentially worth tens of billions of dollars.
With additional investment, OpenAI can work on integrating its AI innovation with other Microsoft products.
This week, it was reported that Microsoft plans to integrate AI technology from OpenAI’s ChatGPT chatbot into its Bing search engine.
See: Microsoft Bing With ChatGPT Reportedly Introducing In March
ChatGPT integration will allow Bing to supply total sentences in action to search questions rather than lists of links.
The upgraded search function is expected to be available by the end of March and can possibly provide Microsoft an advantage over Google.
The tender deal has actually not yet been completed, and the terms could change. OpenAI declined to discuss The Wall Street Journal’s report.