OpenAI in deal valuing it at US$80 billion — Reports

SAN FRANCISCO: OpenAI has concluded a deal with investors that reportedly values the California start-up at US$80 billion or more, after a rollercoaster year for the inventor of ChatGPT.

The agreement, reported by The New York Times but not yet confirmed by OpenAI, would mean the value of the company – a world leader in generative artificial intelligence – would have nearly tripled in under 10 months.

The reported deal would have the San Franciscobased firm selling existing shares to investors led by Thrive Capital.

It would permit executives and employees to sell shares at a highly favorable price, just three months after the firm survived a major crisis when company co-founder and chief executive Sam Altman was fired and then brought back only days later.

OpenAI led a revolution in artificial intelligence when it placed its ChatGPT program online in late 2022.

The immediate success of the interface sparked tremendous interest in the cuttingedge technology, capable of producing text, sounds and images upon demand.

Microsoft, already an investor in the start-up, redoubled its involvement. The software giant has injected some US$13 billion into OpenAI in the past few years.

It is locked in fierce competition with Google to develop and roll out new tools using AI’s generative abilities, to the point that the US Federal Trade Commission (FTC) in January launched an investigation into the enormous investments by Microsoft, Google and Amazon in the specialised start-ups.

OpenAI, founded as a nonprofit in 2015, faced a major crisis last November.

Its board fired CEO Sam Altman, one of Silicon Valley’s more charismatic figures, accusing him of a lack of “transparence.”

In the following days, Microsoft tried to hire him, while both executives and a majority of OpenAI employees demanded that those behind Altman’s ouster resign and that he be rehired.

Within the week, Altman was back at work while several board members resigned.

On Friday, OpenAI – developer not only of ChatGPT but of image-generating DALLE – released a new tool named “Sora,” which can create realistic videos of up to a minute on simple demand.

According to the Times, OpenAI concluded a similar agreement early last year with venture-capital firms including Thrive Capital, Sequoia Capital and Andreessen Horowitz, which valued the firm at US$29 billion.