OpenAI has completed a deal that values the San Francisco artificial intelligence company at $80 billion or more, in less than 10 months, according to three people familiar with the deal. is increasing threefold.
The company will sell existing shares in a so-called tender offer led by venture firm Thrive Capital, the people said. The deal allows employees to cash in their shares in the company instead of a traditional funding round that raises money for business operations.
OpenAI is now one of the world’s most valuable tech startups, behind ByteDance and SpaceX, according to data from data tracker CB Insights, which declined to comment.
The deal is another example of the Silicon Valley deal-making machine pouring money into a handful of companies that specialize in generative AI — technology that can create text, sounds and images on its own. The funding boom began early last year, when OpenAI captured the public imagination with the release of online chatbot ChatGPT.
(The New York Times sued OpenAI and its partner Microsoft in December, claiming copyright infringement for news content about AI systems.)
The deal comes at a critical time for OpenAI, giving it a significant vote of confidence after a year of controversy. In November, the company’s board fired its chief executive, Sam Altman, because he had lost confidence in his leadership. The layoffs sparked a week of chaos and put the company’s future in doubt, as employees threatened to resign in solidarity with Mr. Altman. Eventually, he was reinstated and several board members resigned.
In an effort to resolve last year’s turmoil, OpenAI hired the law firm WilmerHale to review the board’s actions and Mr. Altman’s leadership. Wilmer Hale is expected to complete its report on the incident early this year.
The company had agreed to a similar deal earlier last year. Venture capital firms Thrive Capital, Sequoia Capital, Andreessen Horowitz and K2 Global have agreed to buy shares of OpenAI in a tender offer, valuing the company at about $29 billion.
Thrive declined to comment.
Investors are eager to pour money into AI companies. Last January, Microsoft invested $10 billion in OpenAI, bringing its total investment in the San Francisco startup to $13 billion.
Since then, OpenAI rival Anthropic has raised $6 billion from Google and Amazon. Cohere, a startup founded by former Google researchers, raised $270 million, bringing its total funding to more than $440 million, and Inflection AI, founded by a former Google executive, also raised a $1.3 billion round. , bringing his net worth to $1.5 billion. .
OpenAI appeared close to finalizing its latest deal in November, when Mr. Altman was unexpectedly fired. In the following week, the potential deal fell over efforts to negotiate Mr. Altman’s return to the company. Prior to his reinstatement, more than 700 of the company’s 770 employees signed a petition calling for his reinstatement.