TechCrunch reports that OpenAI, the firm behind the popular conversational AI model ChatGPT, has received more funding.
According to TechCrunch, Tiger Global, Sequoia Capital, Andreessen Horowitz, Thrive, and K2 Global bought new shares. In addition, according to a source, the Founders Fund is investing. VCs have invested over $300 million at a valuation of $27 billion–$29 billion. A person familiar with the development told TechCrunch, which closed in January, that this is independent of Microsoft’s significant investment earlier this year. According to our source, Microsoft’s stake is estimated at $10 billion.
This is the closing of the tender offer the Wall Street Journal reported in January. We confirmed discussions began during a viral interest in OpenAI and its business.
We’ve contacted OpenAI and the investors listed below for comment and will update this story as we hear more. Unfortunately, OpenAI declined to comment on the tender offer, separate from the Microsoft investment completed in January. Microsoft’s contribution is strategic, but the VCs are financial backers.
Investors and the money sent have signed the term sheets, but OpenAI has yet to countersign. The goal was to announce this investment next week. The source reported that foreign investors hold over 30% of OpenAI.
According to PitchBook statistics, Peter Thiel has previously backed the venture, but this is the first time Founders Fund would invest. K2 Global, a firm with one member, Ozi Amanat, and Thrive are also first-time investors. According to PitchBook statistics, Sequoia, A16Z, and Tiger Global invested in the firm before.
Due to the tech sector’s financial crisis, many VCs, including Tiger and Sequoia, have slowed their investing pace, sitting on “dry powder” and waiting for better conditions and opportunities. Therefore, OpenAI may appeal to investors looking for promising AI startups.
“They’re probably trying to use this [funding] to say hey, look; we found a golden apple,” a source said of OpenAI’s current financing. A venture is an odd place where anything may happen. You may go from huge to break to big again anytime.”
GPT, short for Generative Pre-trained Transformer, is OpenAI’s family of massive language models utilized by third parties via APIs. OpenAI has several technical teams working in several fields, but GPT recently garnered notice.
OpenAI announced ChatGPT, a generative AI tool based on GPT, near the end of November 2022. It enables users to write a natural inquiry and get a thoughtful, thorough response. ChatGPT had over 1 billion visitors to its website in February, according to SimilarWeb, without including third-party users.
Generative AI is hot right now, but OpenAI has its share of problems, many of which center on ChatGPT, its consumer-facing platform. For example, people have questioned whether it lies, whether it is a “virus,” how it handles privacy, if it can be manipulated to be toxic or commit libel, and in the wake of so many more rushing into AI development, even the nature of OpenAI’s GPT branding will be long term.
Fairly, OpenAI has acknowledged the effort that has to be made when developing services and iterating. For example, in February, in February, in February, in February, the firm released ChatGPT Plus, a commercial version featuring a speedier user experience,. In March, it received multimodal LLM GPT-4.
The technology and its quickly growing ecosystem are key to OpenAI’s value and investors’ interest.
Hundreds of large and small enterprises have integrated GPT and ChatGPT into their goods and services, joining hundreds of millions of users. That has also accelerated the rollout of generative AI by other big tech companies. For example, Google launched Bard, while Meta created LLaMA to compete with GPT’s LLM.
Since its 2015 launch, OpenAI has had gravitas in the AI sector, not least because of its unique focus. Even though it changed from a non-profit model, that’s remained the case. We don’t know if AI will cause the seismic upheaval many predict, but OpenAI may be the closest thing to a winner in the sector right now.
“We’ve been working on it for so long, but it’s with gradually increasing confidence that it’s going to work,” said co-founder and CEO Sam Altman at an AI conference earlier this month. The firm has been built for seven years. These things take a long time. It worked while others haven’t because we’ve been sweating every aspect long. Most people aren’t willing to do it.”
OpenAI also includes Dall-E, an AI-based image-generation tool updated in July 2018. In addition, whisper AI voice recognition is also available.
Microsoft has integrated OpenAI’s APIs with Azure infrastructure to allow model computations. In addition, in March, Microsoft announced a GPT-4 integration to boost Bing as part of its longtime attempts to compete with Google’s search offerings.
