Microsoft partnership boosts OpenAI valuation to $80 billion

OpenAI, backed by Microsoft, has completed a deal that values the artificial intelligence company at $80bn or more. The company sold existing shares in a tender offer led by venture firm Thrive Capital, allowing employees to cash out their shares rather than raising money through a traditional funding round. OpenAI had agreed to a similar deal early last year with venture-capital firms Thrive Capital, Sequoia Capital, Andreessen Horowitz, and K2 Global, valuing the company at around $29bn.

• OpenAI valued at $80bn after completing deal to sell existing shares in ‘tender offer’
• Company attracted major funding rounds, including Microsoft’s $10bn investment in January 2023

The launch of OpenAI’s ChatGPT in late 2022 has generated buzz around AI, leading companies to explore ways to utilize the technology. Microsoft has integrated AI into its Bing search engine, while OpenAI announced the launch of Sora, a tool that can generate videos from text prompts. Additionally, the company is experimenting with adding deeper memory to ChatGPT to enhance user interaction. OpenAI’s CEO, Sam Altman, has been in discussions to acquire a chip builder to improve access to AI chips.

Following a brief period of turmoil in late 2023, including Altman being fired and rehired, OpenAI’s large investments have drawn regulatory attention. European Commission officials are looking into whether Microsoft’s backing raises antitrust concerns, while the Federal Trade Commission in the US is investigating whether investments from Microsoft, Google, and Amazon into AI companies like OpenAI harm competition. The company continues to make strides in the AI industry with groundbreaking technologies and major financial backing.