OpenAI Valuation Hits $80B in Latest Deal

OpenAI has undergone significant financial growth with its valuation soaring to over $80b through transactions facilitated by Thrive Capital.

According to reports, OpenAI has inked a transaction that will raise the San Francisco-based artificial intelligence (AI) company’s valuation to at least $80 billion, virtually tripling it in less than a decade.

The New York Times reported that the company intends to sell its existing shares through a tender offer headed by Thrive Capital. Unlike traditional funding rounds this strategy enables employees to sell their shares in order to obtain money for company operations.

Similar arrangements were made in 2023, when the article states that venture capital companies Thrive Capital, Sequoia Capital, Andreessen Horowitz, and K2 Global agreed to buy OpenAI shares through a tender offer valuing the business at about $29 billion.

Sam Altman, the CEO of OpenA has allegedly also been promoting alliances between the company and “various investors,” including energy companies and chip manufacturers in an effort to attract money for a semiconductor venture. In an effort to increase global chip production capacity and support the development of new AI-related technologies, the CEO announced that OpenAI would consent to becoming a “significant customer” of the new factories.

It was reported in December 2023 that OpenAI was in talks with investors about putting over $100 billion into the business. Altman was fired by the OpenAI board in November 2023, which led to anarchy and cast doubt on the company’s survival. When coworkers threatened to quit in protest, Altman was reinstated and some board members left.

The law firm WilmerHale was hired by OpenAI to investigate Altman’s leadership and the board’s decisions. The report on the subject is expected to be published early in 2024. The introduction of OpenAI’s ChatGPT in late 2022 generated much of the initial buzz around AI, leading businesses to investigate methods of using the technology.

On Thursday, February 15, the AI company debuted its very first text-to-video model. The new generative AI model called Sora builds complex videos from straightforward text prompts extends already-existing videos and even makes scenarios from still images, while the company acknowledges the model is still in its early stages of development.