OpenAI’s Share Sale Could Value It At $90 Billion

OpenAI’s Share Sale Could Value It At $90 Billion
Theodora Lee Joseph, CFA

2 months ago2 mins

What’s going on here?

OpenAI’s planning a share sale that could value the startup at roughly $90 billion.

What does this mean?

OpenAI isn’t just on track to fling the world toward a dystopian future. ChatGPT's creator is also set to rake in around $1 billion in revenue this year, a result of licensing out brainy language models to businesses and charging individuals for access to a souped-up version of its all-star chatbot. Still, shaping the way the world works is costly business, so OpenAI’s planning to raise cash by selling a bunch of existing shares to deep-pocketed Silicon Valley investors. If all goes to plan, OpenAI could end up valued at $90 billion or more, enough to land it in the major leagues alongside Elon Musk's SpaceX and the TikTok overlords at ByteDance.

OpenAI valuation earlier this year
OpenAI valuation earlier this year

Why should I care?

Zooming in: Microsoft’s mega shares.

Microsoft owns almost half of OpenAI, having tossed a ton of cash into it earlier this year when the startup was worth around $30 billion. This stock sale, then, could triple the value of OpenAI on Microsoft’s books. Mind you, there’s no guarantee that Microsoft can maintain its lead over fellow tech titans. While Google and Meta tinker away on their own AI competitors, Microsoft will have to contend with a minority stake in the startup: OpenAI’s boss has ruled out going public or selling to the highest bidder in an effort to cap Microsoft’s share below half.

The bigger picture: There’s no free lunch in Silicon Valley.

OpenAI’s sudden success is a clear sign of the buzz around AI. And with businesses, industries, and governments around the world all het up about the tech’s possibilities, any firm that brings new silicon smarts to the market could enter the billion-dollar club in a matter of mere months – a feat that usually takes many years. But remember: any opportunity that booms quickly can go bust just as fast, so you’ll need to prepare for some serious ups and downs if you’re invested in tech these days.



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