OpenAI is reportedly in talks with investors to buy employee shares in a sale that could boost its valuation up to $90 billion.
The rumour was first reported by the Wall Street Journal on Tuesday. Instead of raising money by issuing new shares, which would dilute equity, OpenAI is allegedly offering to sell the existing shares its workers own.
Financial details of the potential deal were not disclosed, although the move could see the AI startup's valuation skyrocket to between $80 billion to $90 billion. OpenAI reportedly sold $300 million worth of shares at a $30 billion valuation earlier this year, making that deal look like a bargain.
Microsoft holds a 49 percent stake after investing $10 billion into the company earlier this year. As part of the deal, OpenAI pledged to partner and integrate its AI software with Microsoft's products in return for Redmond's computational resources to train and run its models.
If the trade plan to sell employee shares follows through, Microsoft will no doubt make a significant profit on its investments.
OpenAI will become one of the most highly-valued startups if its valuation goes through.
Founded in 2015, OpenAI was initially a non-profit research lab focused on developing artificial general intelligence. That all changed under CEO Sam Altman, a well-known figure in Silicon Valley who previously led Y Combinator, a top startup accelerator.
OpenAI transformed to a for-profit business and launched its first commercial product, GPT-3, a large language model capable of generating text given an input prompt in 2020. But its non-profit status wasn't to last.
Fast forward three years, and AI has rapidly progressed. OpenAI is a leader in generative AI technology, releasing tools like its text-to-image tool DALL·E or speech-to-text software Whisper. Its most popular product by far, however, is ChatGPT. Subscribers and enterprise customers using the paid version have access to its latest GPT-4 model.
On Monday, OpenAI announced updates to ChatGPT that will allow users to interact with its chatbot using audio and images.
The Register has asked OpenAI for comment. ®
Source: The register