OpenAI CEO Sam Altman.
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OpenAI is in talks for a share sale that could value it at $80 billion-$90 billion, the Wall Street Journal reported.
Instead of issuing new shares to raise capital, a potential deal would allow employees to sell their existing shares.
A $90 billion valuation would make OpenAI one of the most highly valuated global startups.
OpenAI is in talks for a share sale that could value the ChatGPT parent at $80 billion-$90 billion, sources told the Wall Street Journal, potentially vaulting it among the world’s top startups.
Instead of issuing new shares to raise capital, a potential deal would allow employees to sell their existing shares to investors, the report said.
The high end of the valuation range would be triple what it worth early this year, when Microsoft poured billions of dollars into the AI company in a deal that valued it at around $30 billion.
The tech titan now owns a 49% stake in OpenAI, which the Journal said will not let Microsoft participate in any financing rounds that would increase its stake beyond 50%.
In addition, OpenAI CEO Sam Altman has said he doesn’t see the company going public or putting itself up for sale.
But the company still needs to pay for the intensive computing costs required to run the generative AI technology, and the Journal said OpenAI seeks to sell “a few hundred million dollars worth” of existing shares to Silicon Valley investors.
OpenAI didn’t immediately respond to Insider’s request for comment.
Should a deal go through, the company would become one of the most highly valued global startups, ranking behind only TikTok parent ByteDance ($225 billion) and Elon Musk’s SpaceX ($137 billion), according to CB Insights.
For now, OpenAI sees big growth in its future as more and more businesses embrace artificial intelligence. The company currently makes money off of subscriptions for its more-advanced version of ChatGPT, GPT-4, and by licensing the large language models used to develop AI bots to businesses.
OpenAI has told investors that it expects to hit $1 billion in revenue this year, on track to generate billions more in 2024, the Journal reported.
But it’s not immune from competitors. Ever since OpenAI dropped a bomb on the tech world with the ChatGPT launch late last year, Google, Meta and several other tech companies have been working on rival AI models. And earlier this week, Amazon invested $4 billion in ChatGPT competitor Anthropic.