Company to sell shares in ‘tender offer’ led by Thrive Capital, mirroring deal from last year
According to the New York Times, citing multiple sources familiar with the matter, Microsoft-backed OpenAI has finalized a deal valuing the AI company at $80 billion or more. In this deal, the company will sell existing shares in a ‘tender offer’ led by Thrive Capital. This approach allows employees to cash out their shares, contrasting with a typical funding round aimed at raising capital for the business.
OpenAI did not respond immediately to a request for comment. The artificial intelligence company had agreed to a comparable deal in early the previous year. According to the report, venture capital firms Thrive Capital, Sequoia Capital, Andreessen Horowitz, and K2 Global had agreed to purchase OpenAI shares in a tender offer, valuing the company at approximately $29 billion. OpenAI has garnered substantial funding from various sources, including a $10 billion investment from Microsoft in January 2023, as well as funding in 2019 and 2021.
The introduction of OpenAI’s ChatGPT in late 2022 has generated excitement around AI, prompting companies to explore ways to leverage this technology. AI has been incorporated into various products, including Microsoft’s Bing search engine, as it continues to advance its own innovations. OpenAI recently unveiled Sora, a tool capable of generating videos from text prompts. Additionally, the company is experimenting with enhancing ChatGPT’s memory capabilities to enable it to retain more user chats.
Reports suggest that OpenAI CEO Sam Altman is in discussions to acquire a chip manufacturer or otherwise enhance the company’s access to the costly AI chips that underpin its tools.
The most recent deal represents the largest show of support for the company following a short period of unrest in late 2023. During this time, Altman was dismissed by the company’s board but was reinstated after strong objections from employees.
The substantial investments in OpenAI have drawn regulatory scrutiny, with European Commission officials indicating in early January that they would examine whether Microsoft’s support raises antitrust issues. Similarly, on 24 January, the Federal Trade Commission in the US announced an investigation into whether investments from Microsoft, Google, and Amazon in AI firms, including OpenAI, negatively impact competition.
