- Added new information to OpenAI's evaluation.
Update as of January 6, 2023:
The Wall Street Journal, citing anonymous sources, reports that OpenAI’s valuation is expected to be around $29 billion – despite comparatively low revenue. According to the Wall Street Journal, OpenAI’s revenue to date has been in the tens of millions, but it expects strong revenue growth (see more below). In 2021, OpenAI’s valuation was reportedly at $14 billion.
Venture capital firms Thrive Capital and Founders Fund are reportedly set to buy $300 million worth of OpenAI shares. The new investors are to buy shares from existing shareholders, such as employees. No final deal has been reached and terms could change, according to the WSJ.
Microsoft is also said to be interested in investing further in OpenAI. Allegedly, a collaboration for ChatGPT for Bing search is being planned.
The maximum profit per shareholder at OpenAI is said to be limited to a twenty-fold increase. According to OpenAI, this rule is in place so that the company follows its mission of developing safe and useful AI for society, and does not obey investors alone.
Original article from December 17, 2022:
OpenAI expects strong revenue growth from 2024 – report
OpenAI anticipates steep growth in the coming years. By 2024, the company aims to reach $1 billion in revenue.
Since its founding in 2015, OpenAI hasn’t cared much about return on investment. The formerly purely non-profit company has set out with a higher mission than mere mammon: It wants to develop AGI that benefits humanity – or at least doesn’t destroy it.
Investors such as Elon Musk and co-founder Sam Altman provided the start-up capital in 2015. The latter said as recently as May 2019, four years after the company was founded, in an interview at an investor conference that OpenAI had “no idea” how to make the company profitable.
To investors, Altman said, OpenAI had only made a “soft promise” that the artificial general intelligence it was aiming for could likely develop, on demand, an idea of how OpenAI investors would get their profit. The audience laughed.
From AGI to AI products
But without revenue, OpenAI cannot survive in the market eventually, especially since AI competitors Google, Meta and Co. are pouring billions into AI.
In March 2019, OpenAI moved to a more commercial business model and formed the for-profit company OpenAI LP. The following June, Microsoft stepped in as a major investor. Microsoft paid more than $1 billion for exclusive access to AI models such as GPT-3 and likely plans to invest further in OpenAI.
With GPT-3, the DALL-E 2 image model, and now possibly ChatGPT, OpenAI has concrete products on the market that are a far cry from AGI but can be useful tools in everyday life. Microsoft is also integrating aspects of OpenAI’s AI models into its Windows and Office software.
OpenAI expects strong revenue growth from 2024 onwards
Currently, OpenAI is looking for more investors, Reuters reports. In its pitch, the company states revenues of $200 million for the coming year and $1 billion for 2024.
Recently, OpenAI issued shares at a company value of $20 billion, which is at least 500 times its current revenue, according to Reuters and The Information. This shows that OpenAI’s investors are already pricing in enormous growth fantasies, which are apparently not even slowed down by concerns about a possible significant global recession.
Microsoft President Brad Smith, who probably already knows what OpenAI is up to next year with GPT-4 and the like, emphasized to Reuters the potential of the technology, which should become even more apparent in the coming year.
“We’re going to see advances in 2023 that people two years ago would have expected in 2033. It’s going to be extremely important not just for Microsoft’s future, but for everyone’s future,” Smith said.
Microsoft CTO Scott Stein also recently predicted 2023 to be the “most exciting AI year” ever.