ChatGPT creator OpenAI is reportedly in talks to secure a new round of funding that could value the firm at over $100 billion. This is a major leap from the firm’s earlier valuation of $80 billion.
The funding round will be led by Thrive Capital. The VC firm also plans to invest $1 billion as per the details from a source familiar with the matter shared by the Wall Street Journal.
As per the reports, Microsoft is also participating in the funding round. Microsoft had invested $10 billion in OpenAI in early 2023. Additionally, it holds a 49% stake in OpenAI with a collective investment of $13 billion since 2019.
OpenAI’s valuation jumps from $80 billion
OpeanAI stood at a $80 billion valuation earlier this year. However, as per CNBC, OpenAI was valued at $29 billion last year. Things skyrocketed for OpenAI after the launch of its AI chatbot ChatGPT.
However, tight competition from tech giants like Amazon and Google has waned the enthusiasm among the investors. Despite that, OpenAI has been consistently rolling out new features for its ChatGPT users.
As per the latest reports, OpenAI is preparing to launch its next-generation AI product called Strawberry. Strawberry is aimed at launching features in AI problem solving. OpenAI had also announced that ChatGPT free users can create two images per day with DALL·E 3.
OpenAI had disclosed their AI-powered search engine called SearchGPT last month. According to the details, the company is testing SearchGPT with a temporary prototype of new AI search features.
Concerns raised over OpenAI’s sustainability
Several commentators, including media personality Edward Zitron, have raised concerns about the future of OpenAI. Responding to the latest report of the firm’s $100 billion valuation, Zitron tweeted, “I repeat that I am deeply concerned about the future of OpenAI, and do not believe the company is sustainable.”
I repeat that I am deeply concerned about the future of OpenAI, and do not believe the company is sustainablehttps://t.co/EXrQzXliVS https://t.co/Zizej7zHwR pic.twitter.com/s9Xv8j5W8f
— Ed Zitron (@edzitron) August 28, 2024
In one of his recent newsletter postings, Zitron raised questions on OpenAI’s ability to exist in the medium-to-long term. He stated that for OpenAI to survive for more than two years, the AI company has to raise more money than any startup has ever raised in history.
Zitron also highlighted that in an assumption of a burn rate of $3 billion in a year, the company has to raise more capital to either increase revenue or reduce costs.