OpenAI, a leading developer of generative artificial intelligence (A.I.), is seeking a valuation of $90 billion U.S. in its latest funding round, which is about three times more than the company was worth earlier this year.
Media reports say that OpenAI, the privately held company behind A.I. chatbots such as ChatGPT and GPT-4, is in talks with investors about a sale of shares at a $90 billion U.S. valuation, which would be triple the $30 billion U.S. the company was worth in its previous funding round.
The company has apparently told venture capital firms and private investors that it expects to generate $1 billion U.S. in revenue this year and billions more in 2024.
The most widely used version of ChatGPT is free to use. However, individuals pay to access more advanced versions of the chatbot. Companies also pay to license OpenAI’s large language learning models that are used to train A.I. applications.
A valuation of $90 billion means that investors would pay $90 for every dollar of revenue OpenAI generates. That would make OpenAI one of the most expensive technology companies in the world, placing it ahead of competitors such as Alphabet (GOOG, GOOGL).
A valuation of $90 billion U.S. would also make OpenAI one of the most highly valued start-ups currently in existence, putting it behind TikTok owner ByteDance and Elon Musk’s SpaceX, which are valued at $225 billion U.S. and $137 billion U.S., respectively.
However, ByteDance posted $85 billion U.S. in revenue last year, and SpaceX generated $1.5 billion U.S. in revenue during this year’s first quarter.
OpenAI, which only began generating any revenue after the release of ChatGPT last November, remains unprofitable.
Microsoft (MSFT) has invested billions of dollars in OpenAI and owns 49% of the company. OpenAI executives have said that they don’t plan to take the company public anytime soon.
