Reports Indicate OpenAI’s Value Soared to $80 Billion in Latest Transaction
Reports indicate that the company plans to sell existing shares in a tender offer allowing employees to sell their shares, differing from the standard fundraising rounds aimed at raising capital for business operations.
OpenAI has reportedly signed a deal increasing the San Francisco-based artificial intelligence (AI) company’s value to $80 billion or more, representing roughly a threefold increase in less than 10 months. According to a New York Times report, the company intends to sell current shares in a tender offer led by Thrive Capital, allowing employees to sell their shares, differing from standard funding rounds for capital raising for business operations.
Similar arrangements in 2023 saw venture capital firms Thrive Capital, Sequoia Capital, Andreessen Horowitz, and K2 Global agree to purchase OpenAI shares in a tender offer, valuing the company at approximately $29 billion. Sam Altman, CEO of OpenAI, has also been negotiating to raise capital for chip investment and to establish partnerships between the company and various investors, chipmakers, and energy providers. The CEO stated OpenAI would agree to be a significant customer of new factories as he seeks to bolster global chip manufacturing capacity to drive new AI-related tools.
In December 2023, it was reported that OpenAI was negotiating with investors willing to invest over $100 billion in the company. In November 2023, OpenAI’s board ousted Altman, causing chaos and doubt about the company’s future, with employees threatening to resign in solidarity, which led to Altman’s reinstatement and some board members leaving. OpenAI used the law firm WilmerHale to review board decisions and Altman’s leadership, with the report expected to be presented in early 2024. OpenAI’s launch of ChatGPT in late 2022 caused a stir around AI, prompting companies to explore ways to leverage the technology’s power. The AI company unveiled its first text-to-video model on Thursday, February 15.
Although the company admits the model still has a long way to go, the new AI model named Sora creates accurate videos from simple text messages, continues existing videos, and even produces scenes based on a single still image.
