OpenAI has struck a deal that values the San Francisco artificial intelligence company at $80 billion or more, nearly tripling its valuation in less than 10 months, according to three people with knowledge of the deal.
The company would sell its existing shares in a tender offer led by venture capital firm Thrive Capital, the sources said. The deal allows employees to cash out their shares in the company, rather than a traditional financing round that would raise money for business operations.
OpenAI, which declined to comment, is now one of the world’s most valuable tech startups, behind ByteDance and SpaceX, according to figures from data tracker CB Insights.
The deal is another example of Silicon Valley’s deal-making machine pumping money into a handful of companies specializing in generative AI – technology capable of generating text, sounds and text on its own. images. The funding boom began early last year, after OpenAI captured the public imagination with the release of online chatbot ChatGPT.
(The New York Times sued OpenAI and its partner Microsoft in December, alleging copyright infringement over news content related to AI systems.)
The deal comes at a critical time for OpenAI, providing it with a significant vote of confidence after a year of controversy. In November, the company’s board fired Sam Altman, its chief executive, because it had lost confidence in his leadership. The firing sparked a week of chaos and put the company’s future in doubt, with employees threatening to quit in solidarity with Mr Altman. Eventually he was reinstated and several board members resigned.
In an attempt to resolve last year’s turmoil, OpenAI hired the law firm WilmerHale to review the board’s actions and Mr. Altman’s leadership. WilmerHale is expected to complete his report on the episode early this year.
The company struck a similar deal early last year. Venture capital firms Thrive Capital, Sequoia Capital, Andreessen Horowitz and K2 Global agreed to buy OpenAI’s shares in a tender offer, valuing the company at approximately $29 billion.
Thrive declined to comment.
Investors are eager to pour money into AI companies. Last January, Microsoft invested $10 billion in OpenAI, bringing its total investment in the San Francisco startup to $13 billion.
Since then, Anthropic, a rival to OpenAI, has raised $6 billion from Google and Amazon. Cohere, a startup founded by former Google researchers, raised $270 million, bringing its total funding to more than $440 million, and Inflection AI, founded by a former Google executive, also raised 1 .3 billion, bringing its total to $1.5 billion. .
OpenAI appeared to be close to finalizing its latest deal in November, when Mr. Altman was unexpectedly let go. In the week that followed, the potential deal dominated Mr. Altman’s efforts to negotiate his return to the company. Before his reinstatement, more than 700 of the company’s 770 employees signed a petition calling for his reinstatement.
