Investors are showing strong confidence in Sam Altman-led OpenAI as the company seeks to raise $5 billion or more in its latest funding round.
What Happened: The San Francisco-based start-up, backed by Microsoft Corp. MSFT is finalizing a new fundraising round that values the company at $150 billion. Thrive Capital, led by Josh Kushner, has already invested at least $1 billion in recent weeks, according to sources familiar with the deal, Financial Times reported on Friday.
"We're talking about the path to building a trillion-dollar company," a partner at an investment backing OpenAI said.
Another investor revealed that while the stakes are high, the ChatGPT maker has a dominant position both as an enterprise and among the consumer base.
“This type of business tends to be ‘winner takes most': you're not going to have two ChatGPTs on your phone," the investor added.
However, some leading tech investors are also opting out of this round, according to sources. Concerns about achieving venture-style returns on such a large investment have been raised by some investors.
Why It Matters: The valuation of $150 billion for OpenAI hinges on significant corporate changes, including the removal of a profit cap for investors. This shift from a research-based non-profit to a more investment-attractive entity aims to support its pursuit of artificial general intelligence (AGI).
In August, Apple and Nvidia were reportedly in talks to invest in OpenAI, as the company’s valuation climbed to $100 billion. This interest from major tech companies underscores the growing importance of artificial intelligence in the tech industry.
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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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