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

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

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

The offer is reportedly being negotiated with equity capital firms Prosper Capital and Founders Fund. If it goes through it would make OpenAI among the most valuable start-ups in the United States.

The considerable 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 very first five days of being provided to the general public.

Given that OpenAI’s most popular product is provided for free, it might seem surprising that the business is valued so extremely.

OpenAI generates millions in earnings by offering its AI software application to developers. OpenAI is currently providing cloud services to Microsoft for tools that enable users to produce text, code, and images utilizing simple instructions.

Additionally, as a research company, OpenAI is moneyed through a mix of contributions, sponsorships, and grants.

A few of the sources of financing for OpenAI include business 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 talking about the possibility of making a much larger investment in the AI service, potentially worth tens of billions of dollars.

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

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

See: Microsoft Bing With ChatGPT Reportedly Introducing In March

ChatGPT integration will permit Bing to offer total sentences in reaction to search queries instead of lists of links.

The updated search function is expected to be readily available by the end of March and can possibly provide Microsoft a benefit over Google.

The tender offer has actually not yet been settled, and the terms could alter. OpenAI decreased to discuss The Wall Street Journal’s report.