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ChatGPT’s Popularity Boosts OpenAI’s Value To $29 Billion

ChatGPT developer OpenAI is reportedly considering a tender offer valuing the company at $29 billion, making it one of the most valuable US startups.

According to a report from The Wall Street Journal, research lab OpenAI, the developer of ChatGPT, is considering a tender offer that would value the company at around $29 billion.

The offer would involve purchasing a specified number of shares from existing shareholders at a fixed price and would roughly double OpenAI’s valuation from a previous tender offer completed in 2021, when the company was valued at around $14 billion.

The deal is reportedly being negotiated with venture capital firms Thrive Capital and Founders Fund. If it goes through it would make OpenAI one of the most valuable startups in the United States.

The significant increase in the company’s value is likely due in part to the widespread popularity of ChatGPT, which gained over a million users within the first five days of being made available to the public.

Given that OpenAI’s most popular product is offered for free, it may seem surprising that the company is valued so highly.

OpenAI generates millions in revenue by selling its AI software to developers. OpenAI is currently providing cloud services to Microsoft for tools that allow users to create text, code, and imagery using simple instructions.

Additionally, as a research organization, OpenAI is funded through a combination of donations, sponsorships, and grants.

Some of the sources of funding for OpenAI include companies like Microsoft and individual philanthropists such as Elon Musk and Sam Altman.

In 2019, Microsoft invested $1 billion in OpenAI, and the company has been discussing the possibility of making a much larger investment in the AI business, potentially worth tens of billions of dollars.

With further investment, OpenAI can work on integrating its AI technology with other Microsoft products.

This week, it was reported that Microsoft plans to incorporate AI technology from OpenAI’s ChatGPT chatbot into its Bing search engine.

See: Microsoft Bing With ChatGPT Reportedly Launching In March

ChatGPT integration will allow Bing to provide complete sentences in response to search queries rather than lists of links.

The updated search function is expected to be available by the end of March and can potentially give Microsoft an advantage over Google.

The tender deal has not yet been finalized, and the terms could change. OpenAI declined to comment on The Wall Street Journal’s report.

Category News Tools
SEJ STAFF Matt G. Southern Senior News Writer at Search Engine Journal

Matt G. Southern, Senior News Writer, has been with Search Engine Journal since 2013. With a bachelor’s degree in communications, ...

ChatGPT’s Popularity Boosts OpenAI’s Value To $29 Billion

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