OpenAI closes $300M share sale to VCs at $27B-29B valuation

OpenAI

OpenAI, the company behind the groundbreaking AI  chatbot ChatGPT, has closed a more than $300 million share sale at a valuation between $27 billion and $29 billion, TechCrunch reported on Friday.

VC companies like Tiger International, Sequoia Capital, Andreessen Horowitz (A16Z), Thrive and K2 International have taken up new shares, according to paperwork verified by TechCrunch.

This funding follows the mega-investment of around $10 billion made by Microsoft earlier this year. However, whereas Microsoft’s investment has a robust strategic angle as it aims to combine OpenAI’s tech across several aspects of its enterprise, the VC share purchases come simply as monetary support.

Sources told Techcrunch that external investors now hold more than 30 percent of OpenAI.

Data from PitchBook suggests venture capitalist Peter Thiel is already an investor in OpenAI, along with Sequoia, A16Z and Tiger Global. However, it will be the first time for VCs like K2 Global and Thrive to fund the startup.

Interestingly, despite the controversies surrounding the authenticity, integrity and security of responses generated by generative AI, it cannot be denied that the technology is a rage presently. Still in its nascent stages, this area of technology might be looking at a long growth runway.