The company that created ChatGPT, OpenAI, talks about a tender offer that could be worth $29 billion. The artificial intelligence-powered chatbot tool ChatGPT's creator, OpenAI Inc., is the target of a tender offer from investors that could boost its valuation to as much as $29 billion.
In a deal that would see them buy shares from current OpenAI shareholders like its employees, the venture capitalist firms Founders Fund and Thrive Capital are reportedly in talks to invest in the hot startup. This is according to a report from the Wall Street Journal today.
If the deal goes through, OpenAI's previous valuation of $14 billion, established following its most recent tender offer in 2021, would more than double.
With the release of its popular chatbot tool ChatGPT in the latter part of last year, OpenAI recently captured the public's attention. Almost any question can receive an intelligent, human-like response from the chatbot, even a challenging one like "describe a debate between two students about the value of education."
According to a tweet from Chief Executive Sam Altman, ChatGPT had more than a million users within a few days of its launch on Nov. 30. (pictured).
Industry observers assert that ChatGPT is such a significant technological advance that it may someday compete with Google LLC as a substitute for Google Search, although Altman has previously acknowledged that it still has bugs.
DALL-E, an AI-powered image generation tool that has displayed human-level artistic talent by producing some incredible images based on people's text-based descriptions, is another project of OpenAI.
The startup was established in 2015 as a nonprofit with the goal of advancing AI research for the good of humanity. In 2019, OpenAI established a for-profit division to raise more money for the computing power required to train its algorithms.
Elon Musk, the CEO of Tesla Inc., Reid Hoffman, a co-founder of LinkedIn Corp., and David Altman, a former president of renowned venture capital firm Y Combinator, were among its original backers. However, Microsoft Corp., a business with which OpenAI has developed a close relationship, has provided the majority of the funding raised by the organization since that time.
According to analyst Rob Enderle of SiliconANGLE, Microsoft intends to heavily incorporate ChatGPT into upcoming products, including its Bing search engine. ChatGPT is currently thought of as the industry's top conversational AI technology.
Enderle predicted that ChatGPT would fundamentally alter how we interact with computers, particularly with regard to internet search. This updated and higher valuation demonstrates the technology's sudden rise to prominence as well as Microsoft's interest in it. Investors now find it to be very desirable, and it may eventually change the way people interact with computers in profound ways.
The intriguing thing is that despite the target of $29 billion appearing extreme given its earlier valuation of less than half that amount, it may actually be a conservative estimate given the enormous interest generated by its technology.
In order for AI to fully mimic human intelligence, creativity, and thoughtfulness, researchers refer to this as "artificial general intelligence," which is what OpenAI claims is the ultimate goal of its technology. In a December interview with the Journal, Altman claimed that OpenAI's tools might have a similarly transformative impact on society as the smartphone did. He thinks AI can be employed to find solutions to some of the most significant problems the scientific community is currently facing.
In order for AI to fully mimic human intelligence, creativity, and thoughtfulness, researchers refer to this as "artificial general intelligence," which is what OpenAI claims is the ultimate goal of its technology. In a December interview with the Journal, Altman claimed that OpenAI's tools might have a similarly transformative impact on society as the smartphone did. He thinks AI can be employed to find solutions to some of the most significant problems the scientific community is currently facing.
According to Constellation Research Inc.'s Holger Mueller, "ChatGPT has really opened people's eyes to how far AI has progressed." "It's gotten to the point where it's unclear whether a human or an AI did the work. Therefore, it is not surprising that early-stage investors have become interested in this.
The only practical way for investors to get on the ChatGPT AI bandwagon early is through a tender offer because OpenAI is a tricky case because it doesn't want to go public.
The only way for investors in OpenAI to exit the business is through secondary share sales, so the tender offer is necessary. Investors in OpenAI, however, have a reason not to sell.
The Journal claims that investors in the company are only allowed to make about 20 times their initial investment in profits, though they can make more money by holding onto their shares for a longer period of time.