OpenAI has closed 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 existing shares in a so-called takeover bid led by venture firm Thrive Capital, the people 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 most valuable tech startups in the world, 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 that specialize in generative ai, technology that can generate text, sounds and images on its own. The funding boom began early last year, after OpenAI captured the public's imagination with the launch of the online chatbot ChatGPT.
(The New York Times sued OpenAI and its partner, Microsoft, in December, alleging copyright infringement of news content related to artificial intelligence systems.)
The deal comes at a critical time for OpenAI, giving it an important vote of confidence after a year of controversy. In November, the company's board fired Sam Altman, its chief executive, because he lost confidence in his leadership. The firing sparked a week of chaos and put the company's future in doubt as employees threatened to resign in solidarity with Altman. Ultimately, he was reinstated and several board members resigned.
In an attempt to resolve last year's turmoil, OpenAI hired law firm WilmerHale to review the board's actions and Altman's leadership. WilmerHale is expected to finish his report on the episode early this year.
The company reached a similar agreement early last year. Venture capital firms Thrive Capital, Sequoia Capital, Andreessen Horowitz and K2 Global agreed to buy OpenAI shares in a public offering, valuing the company at around $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 a $1,300 round. million dollars, bringing its total to 1.5 billion dollars. .
OpenAI appeared close to closing its latest deal in November, when Altman was unexpectedly fired. In the following week, the potential deal loomed over 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.
