OpenAI, the company behind the renowned ChatGPT, is currently in discussions to sell shares held by its existing employees at an impressive valuation of $86 billion, as reported by Bloomberg. These negotiations are part of a tender offer, and the firm is engaged in talks with potential investors, although the exact details are still in flux, according to individuals familiar with the matter who have requested anonymity due to the confidential nature of the discussions.
OpenAI, which boasts Microsoft Corp. as a significant 49% owner, is under the leadership of CEO Sam Altman and President Greg Brockman. At this staggering $86 billion valuation, the company is poised to join the ranks of some of the world’s most valuable privately held enterprises, just behind Elon Musk’s SpaceX and the parent company of TikTok, ByteDance, surpassing giants like Stripe and the Chinese online retail giant Shein.
Earlier in September, the firm was already reported to be in discussions with potential investors regarding a share sale that could value the company at $80 billion to $90 billion. This valuation represents a threefold increase from its valuation earlier this year.
It’s worth noting that OpenAI has been making significant strides, with reports from August suggesting that the company is well on its way to achieving annual revenue of $1 billion, driven by the increasing adoption of its groundbreaking AI technology.
OpenAI made waves in Silicon Valley when it unleashed ChatGPT in November, setting off a fervor in the artificial intelligence landscape. While the basic version of ChatGPT remains free, OpenAI has generated revenue by offering individuals access to a more potent iteration of ChatGPT and licensing its extensive language models to businesses.
Established in 2015 as a research-oriented nonprofit with backing from Elon Musk and other investors, OpenAI initially focused on safe AI technology development. In 2019, it transitioned to a “capped profit” structure to accommodate the substantial investments required for computing power and recruiting top AI talent from tech giants like Google’s Alphabet.
However, this shift triggered controversy, as some safety researchers at OpenAI were concerned that profit would take precedence over the safe advancement of technology. This dissent led to the formation of a rival lab called Anthropic, which recently secured an investment of up to $4 billion from Amazon.com.
Over the past year, Altman has emerged as a prominent voice in the global conversation surrounding AI regulation. He shares the aspiration with many tech leaders to develop artificial general intelligence (AGI), a system capable of matching human intelligence and reasoning.
During a congressional hearing in May, Altman urged Congress to establish licensing and safety standards for advanced AI systems, a stance that garnered criticism from fellow entrepreneurs who argued that such standards would benefit incumbents like OpenAI.
Altman has asserted that OpenAI has no plans to go public or sell itself, underscoring the significance of these periodic sales of existing shares as a means for employees to capitalize on their stock holdings.
OpenAI is resolute in maintaining Microsoft’s minority stake in the company, ensuring that the tech giant cannot acquire shares that would elevate its ownership stake beyond 50%.
Recently, Altman was been dragged into controversy as his sister, Annie Altman, as relayed experiencing various forms of abuse, including sexual, from her brother. Sam Altman is the oldest of four children, and has two brothers, Max and Jack.
Information for this story was found via Bloomberg, Reuters, and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.