San Francisco-based OpenAI is reportedly in talks to raise capital at a valuation of $29bn, according to sources familiar with the matter, as venture capitalists rush to invest in the developer of artificial intelligence bot ChatGPT.
OpenAI is said to be in discussions with investment firms including Peter Thiel’s Founders Fund to carry out a tender offer of existing shares, which would allow investors to purchase OpenAI shares from current shareholders, including employees.
The company was valued at around $20bn in 2021, and a deal at the reported valuation would mark a significant increase.
The talks come less than a month after the release of the latest version of OpenAI’s GPT-3.5 software.
The chatbot, which can communicate with users through text and images, quickly gained viral popularity and reached over one million users within five days.
OpenAI was founded in 2015 by tech figures including Elon Musk, Thiel and Sam Altman with the aim of developing “safe” AI.
Microsoft Corporation (NASDAQ:MSFT) invested US$1bn in the company in 2019 as part of an agreement to jointly develop new computing technologies.