Artificial intelligence (AI) firm OpenAI is reportedly discussing a share sale with investors, which could catapult its valuation to $90 billion. That’s a sharp rise from its earlier valuation this year, showcasing a threefold increase.
As reported by The Wall Street Journal, Microsoft Corp. (NASDAQ:MSFT), which owns a 49% stake in the startup, is banking on revenues of $1 billion this year. The AI firm also has ambitious plans to rake in billions more by 2024. OpenAI’s primary revenue model revolves around charging users for access to a premium version of ChatGPT and licensing its AI bot’s large language models to businesses.
The proposed share sale is designed to enable OpenAI’s employees to offload their existing shares, rather than the company issuing new shares to attract additional capital. Representatives from OpenAI have begun pitching the deal to investors, although the terms are subject to change, according to WSJ.
Should the company’s valuation exceed the $80 billion threshold, OpenAI would join the ranks of the world’s most highly-valued startups, following closely behind Elon Musk‘s SpaceX and ByteDance, the parent company of TikTok, the Journal reports.
The potential $90 billion valuation is a clear indicator of the growing importance and value of AI technology. As OpenAI continues to develop its offerings, this valuation could set new precedents in the AI industry, raising the bar for competing firms. Moreover, with Microsoft’s stake in OpenAI, the tech giant could also benefit from the startup’s success.
Despite this news, Microsoft’s stock closed 1.7% lower on Tuesday, extending a three-day losing streak. September has proven to be the tech giant’s most challenging month in 2023, with a 4.8% drop as of Sept. 26.
Produced in association with Benzinga
