ChatGPT's creator sets sights on a massive $100 billion valuation
Gearing up for a massive funding round, the brains behind ChatGPT, OpenAI, is aiming for a jaw-dropping $100 billion valuation. So far, tech giant Microsoft has been OpenAI's primary financial backer, shelling out over $10 billion, according to multiple sources. Now, venture capital firm Thrive Capital aims to invest an impressive $1 billion, as reported by the "Wall Street Journal" and other trustworthy sources, citing inside knowledge. Meanwhile, Microsoft is also rumored to be contributing more funds, although the specifics are still under wraps, as per Bloomberg's financial service.
Valuations in funding rounds directly mirror the investment share received by investors. Back in 2012, before its IPO, Facebook was valued similarly. However, maintaining billion-dollar valuations long-term proves challenging for many startups.
AI's Billion-Dollar Battlefield
For over a year, ChatGPT has been the talk of the town in AI circles. These AI models, trained on vast data sets, can generate human-like text, code software, and summarize data. Essentially, they predict the next word based on the context.
The AI race in Silicon Valley has turned fiercer than ever. Developing and maintaining these models can require billions in computing infrastructure investments. Tech giants like Google, Meta (formerly Facebook), and others have the resources to afford this. Beyond investing in their own AI models, they're also backing AI startups. Take, for instance, Anthropic, a notable competitor to OpenAI with chatbot Claude, which has raked in billions from investors like Google and Amazon.
OpenAI's triumphs in the AI realm have substantial implications for the broader economy, particularly the tech sector. The high costs of development and maintenance in AI have led to substantial investment in this field, making AI development a significant resource consumer.
Insights:
- OpenAI's new funding round targets a staggering $40 billion, valuing the company at $300 billion, according to unnamed sources.
- Beyond Microsoft, SoftBank is reportedly interested in investing between $15 billion and $25 billion in OpenAI, becoming the company's largest investor after this round.
