OpenAI, the company behind the popular chatbot ChatGPT, has closed a more than $300 million funding round at a valuation between $27 billion and $29 billion. It’s one of a wave of “generative AI” that’s revolutionizing industries and creating a quickly growing ecosystem around artificial intelligence.
ChatGPT is an AI-powered chatbot developed by OpenAI that can answer questions in various languages. It’s also used for generating text and images, with its latest version, GPT-4, upgrading its capabilities.
It can answer questions about cliche rom-com in alternate universes, explain quantum mechanics, write bad stand-up comedy scripts, and even research the most complex matters in seconds. But the hottest thing about ChatGPT isn’t just that it’s an AI; it’s a powerful machine that understands human emotion and language well.
That’s a massive advantage over other chatbots and traditional search engines, which often churn out keyword queries. It means we can use ChatGPT to answer a question about our favorite celebrity, and the AI will respond with a full-length article on the subject in no time.
The company also has several other products, including the image-generation tool Dall-E and the speech recognition model Whisper AI. It’s also developing Point-E, a way to create 3D models with worded prompts.
Generative AI has been all the rage, but despite its apparent popularity, there are also a lot of controversies around the technology. People have asked whether it lies, if it’s a virus, if it handles privacy if it can be manipulated to be toxic or commit defamation. With so many other AI companies jumping into the fray, it’s all been exciting to watch.
VC firms are in talks to buy shares.
A tender offer for at least $300 million in OpenAI shares is being negotiated by a handful of VCs, including Thrive Capital and Founders Fund. According to sources familiar with the negotiations, the deal would value the company at $29 billion, making it one of the most valuable U.S. startups on paper, despite generating little revenue.
This would be a significant boost for Microsoft, which is deepening its ties with OpenAI and using its generative AI technology throughout its consumer and corporate products and in the Azure cloud. It’s an essential strategy for the Redmond, Washington-based software giant as it battles to expand its market share in the cloud services business and to take on rival Amazon.
Several VCs involved in this new round, including Thrive and Founders Fund, have invested in OpenAI before. But this is the first time they’ve invested in the company with a strategic role and the first time Peter Thiel has been involved.
It’s still being determined who will ultimately end up owning the company, but the deal shows that many VCs are still willing to invest in promising startups. However, they’re doing so with a lot of caution, having recently slowed down their investment pace in light of the monetary disaster that has hit the tech sector in recent years.