OpenAI has entered into a transformative deal with venture capital firm Thrive Capital, propelling its valuation to an impressive $80 billion or more, according to reports from the New York Times and Forbes. This marks a remarkable threefold increase in value in just nine months.
Under the terms of the agreement, OpenAI will partake in an existing share sale, led by Thrive in a “so-called tender offer.” This strategic move allows employees to capitalise on their shares within the artificial intelligence company. The development comes nearly 10 months after OpenAI secured a $300 million share sale, establishing its valuation at around $27 billion.
If the reported $80 billion valuation holds true, OpenAI would solidify its position as the third-highest-valued tech startup globally, trailing only behind TikTok’s parent company ByteDance ($225 billion) and Elon Musk’s SpaceX ($150 billion), according to CB Insights data cited by the Times.
Talks of a potential deal surfaced in 2023, with discussions revolving around a share sale that could have valued OpenAI at up to $90 billion, as reported by the Wall Street Journal. However, specific details about the current deal remain undisclosed, as both OpenAI and Thrive Capital had yet to respond to Forbes’ requests for comment before press time.
Founded in 2015, OpenAI has garnered significant investments from various tech companies and investors. Microsoft’s $13 billion investment in OpenAI, without owning any portion but entitled to profit distributions, stands out among the notable financial backing. Thrive, Sequoia Capital, Andreessen Horowitz, and K2 Global had collectively invested last April, bringing OpenAI’s valuation to approximately $27 billion.
Despite internal upheaval and the temporary ousting of CEO Sam Altman, who was swiftly reinstated, OpenAI remains firm on its stance of not going public in the near future. The recent deal coincides with OpenAI’s unveiling of its latest product, Sora, capable of generating videos from text prompts. However, details on the public release are uncertain, as OpenAI emphasises undergoing “important safety steps” to address potential concerns related to misinformation and bias.
This strategic collaboration underscores a dynamic evolution of OpenAI and the company’s pursuit of advancing artificial intelligence capabilities, setting new benchmarks in the tech industry.
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