ChatGPT’s Popularity Boosts OpenAI’s Value To $29 Billion

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According to a report from The Wall Street Journal, research study lab OpenAI, the developer of ChatGPT, is thinking about a tender offer that would value the business at around $29 billion.

The offer would involve acquiring a defined number of shares from existing shareholders at a fixed cost and would approximately double OpenAI’s valuation from a previous tender offer completed in 2021, when the company was valued at around $14 billion.

The offer is supposedly being worked out with venture capital companies Prosper Capital and Founders Fund. If it goes through it would make OpenAI one of the most important start-ups in the United States.

The significant boost in the business’s value is likely due in part to the widespread appeal of ChatGPT, which acquired over a million users within the very first five days of being made available to the public.

Given that OpenAI’s most popular product is used for free, it might appear unexpected that the business is valued so highly.

OpenAI generates millions in income by offering its AI software application to designers. OpenAI is presently supplying cloud services to Microsoft for tools that allow users to develop text, code, and imagery utilizing easy directions.

In addition, as a research company, OpenAI is moneyed through a mix of donations, sponsorships, and grants.

A few of the sources of financing for OpenAI consist of companies like Microsoft and individual philanthropists such as Elon Musk and Sam Altman.

In 2019, Microsoft invested $1 billion in OpenAI, and the company has been discussing the possibility of making a much larger investment in the AI company, possibly worth tens of billions of dollars.

With more investment, OpenAI can work on integrating its AI innovation with other Microsoft products.

Today, it was reported that Microsoft prepares to integrate AI technology from OpenAI’s ChatGPT chatbot into its Bing online search engine.

See: Microsoft Bing With ChatGPT Reportedly Launching In March

ChatGPT combination will enable Bing to provide total sentences in response to search inquiries instead of lists of links.

The upgraded search function is expected to be available by the end of March and can possibly provide Microsoft an advantage over Google.

The tender offer has not yet been settled, and the terms could alter. OpenAI declined to comment on The Wall Street Journal’s report.