OpenAI LP, the company behind the hughly popular AI service ChatGPT, is reportedly in discussions with investors regarding a share sale that could value the company at an impressive $80 to $90 billion. This valuation would mark a substantial increase from its earlier valuation earlier this year, nearly tripling its worth.
According to a recent report in The Wall Street Journal (WSJ), OpenAI intends to facilitate this deal by allowing its employees to sell their existing shares, rather than issuing new shares to raise additional capital. Sources supposedly close to the matter have revealed that OpenAI is actively pitching this proposition to potential investors, stating that they anticipate achieving $1 billion in revenue for the current year, with expectations of generating many more billions in 2024.
The $1 billion revenue projection aligns with a previous reports from August, which were also based on insights from individuals within the company. At that time, it was disclosed that OpenAI had seen a substantial revenue increase, driven primarily by the launch of ChatGPT Plus, a premium subscription service priced at $20 per month, which was introduced in February.
WSJ claims OpenAI’s plan entails selling several hundred million dollars’ worth of existing shares to investors in Silicon Valley. Notably, previous rounds of share sales have attracted the attention of established firms such as Sequoia Capital Global Advisors LLC and Khosla Ventures LLC. The current offering is reportedly generating considerable interest, including from tech investment giant SoftBank Group Corp.
It’s important to note that this share sale, if executed, will not infuse OpenAI with additional operational funds, something they have reportedly been looking for as far back as May. Instead, it will enable the company’s employees to divest some of their shares. Such share sales are a common strategy to allow employees to access the value of their equity before a company goes public, aiding in talent recruitment and providing liquidity.
If OpenAI proceeds with this plan to enable employees to sell their shares, it would lead to a significant boost in the company’s valuation. This is remarkable given that OpenAI was valued at approximately $30 billion when it secured a $10 billion investment from Microsoft Corp. in January. A $90 billion valuation would imply that Microsoft’s investment has appreciated substantially in just nine months.
This development follows OpenAI’s recent announcement that ChatGPT now supports voice and image inputs, expanding its capabilities and making it an even more versatile and powerful AI tool.