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Los Angeles Times
a day ago
- Business
- Los Angeles Times
OpenAI staffers to sell $6 billion in stock to SoftBank, other investors
Current and former OpenAI employees plan to sell approximately $6 billion worth of shares to an investor group that includes Thrive Capital, SoftBank Group Corp. and Dragoneer Investment Group, in a deal that values the ChatGPT maker at $500 billion, according to people familiar with the matter. The talks are early and the size of the share sale could still change, said the people, who asked not to be identified discussing private information. The secondary share investment is on top of SoftBank's commitment to lead OpenAI's $40 billion funding round, which values the company at $300 billion, according to another person familiar with the deal. That round remains ongoing, with OpenAI recently securing $8.3 billion from a syndicate of investors. Representatives for Dragoneer and Thrive didn't respond to requests for comment. Spokespeople for OpenAI and SoftBank declined to comment. All three firms are existing OpenAI backers. The secondary share sale, which was first reported by Bloomberg, will give OpenAI employees a chance to get cash-rich amid a high-stakes talent war in the artificial intelligence industry. Companies like Meta Platforms Inc. are offering massive salaries to recruit AI talent from OpenAI and other startups. This year, several OpenAI employees have exited for Meta, including Shengjia Zhao, a co-creator of ChatGPT. Allowing employees to sell shares is an important tool for startups trying to retain top talent, without requiring the company to go public or be acquired. In some cases, early investors also use these deals to sell down their stakes, though OpenAI investors are not eligible to do so in this round, according to a person familiar with the matter. Current and former employees who spent at least two years at the company are able to participate. With its participation in the share sale, as well as its previous commitments, SoftBank is making a pivotal bet on the success of OpenAI. In addition to those deals, the Japanese conglomerate headed by Masayoshi Son recently closed a separate $1 billion purchase of OpenAI employee shares at a $300 billion valuation, according to a person familiar with the matter. Negotiations for that deal started before talks around the $500 billion secondary valuation began, they said. The $500 billion valuation would make OpenAI the world's most valuable startup, surpassing Elon Musk's SpaceX. The company expects revenue to triple this year to $12.7 billion, up from $3.7 billion in 2024, Bloomberg has reported. And the secondary deal talks come on the heels of the release of its highly-anticipated GPT-5 model. This week, OpenAI chief Sam Altman sat down with a group of reporters and shared his vision for the company, including that it wants to spend trillions of dollars on the infrastructure required to run AI services in the 'not very distant future.' 'You should expect a bunch of economists to wring their hands and say, 'This is so crazy, it's so reckless,' and whatever,' Altman said. 'And we'll just be like, 'You know what? Let us do our thing.'' Clark writes for Bloomberg.
Business Times
2 days ago
- Business
- Business Times
OpenAI staffers to sell US$6 billion in stock to softbank, other investors
[NEW YORK] Current and former OpenAI employees plan to sell approximately US$6 billion worth of shares to an investor group that includes Thrive Capital, SoftBank Group and Dragoneer Investment Group, in a deal that values the ChatGPT maker at US$500 billion, according to sources familiar with the matter. The talks are early and the size of the share sale could still change, said the sources, who asked not to be identified discussing private information. The secondary share investment is on top of SoftBank's commitment to lead OpenAI's US$40 billion funding round, which values the company at US$300 billion, according to another source familiar with the deal. That round remains ongoing, with OpenAI recently securing US$8.3 billion from a syndicate of investors. Representatives for Dragoneer and Thrive did not respond to requests for comment. Spokespeople for OpenAI and SoftBank declined to comment. All three firms are existing OpenAI backers. The secondary share sale will give OpenAI employees a chance to get cash-rich amid a high-stakes talent war in the artificial intelligence (AI) industry. Companies such as Meta Platforms are offering massive salaries to recruit AI talent from OpenAI and other startups. This year, several OpenAI employees have exited for Meta, including Shengjia Zhao, a co-creator of ChatGPT. Allowing employees to sell shares is an important tool for startups trying to retain top talent, without requiring the company to go public or be acquired. In some cases, early investors also use these deals to sell down their stakes, though OpenAI investors are not eligible to do so in this round, according to a source familiar with the matter. Current and former employees who spent at least two years at the company are able to participate. With its participation in the share sale, as well as its previous commitments, SoftBank is making a pivotal bet on the success of OpenAI. In addition to those deals, the Japanese conglomerate headed by Masayoshi Son recently closed a separate US$1 billion purchase of OpenAI employee shares at a US$300 billion valuation, according to a source familiar with the matter. Negotiations for that deal started before talks around the US$500 billion secondary valuation began, they said. The US$500 billion valuation would make OpenAI the world's most valuable startup, surpassing Elon Musk's SpaceX. The company expects revenue to triple this year to US$12.7 billion, up from US$3.7 billion in 2024, Bloomberg has reported. And the secondary deal talks come on the heels of the release of its highly-anticipated GPT-5 model. This week, OpenAI chief Sam Altman sat down with a group of reporters and shared his vision for the company, including that it wants to spend trillions of US dollars on the infrastructure required to run AI services in the 'not very distant future.' 'You should expect a bunch of economists to wring their hands and say, 'This is so crazy, it's so reckless,' and whatever,' Altman said. 'And we will just be like, 'You know what? Let us do our thing.'' BLOOMBERG
Time of India
3 days ago
- Business
- Time of India
After special $100 million bonuses and 'warning', OpenAI allows employees to sell $6 billion in stock to SoftBank, other investors
OpenAI, the creator of ChatGPT , is in talks for a major secondary share sale that would value the company at an astounding $500 billion. According to sources familiar with the matter, current and former employees are planning to sell about $6 billion worth of shares to an investor group that includes Thrive Capital, SoftBank Group Corp., and Dragoneer Investment Group. While the deal is still in its early stages and the final sale size could change, this move gives employees a way to cash in their equity. This is a crucial strategy for startups like OpenAI to retain top talent in a highly competitive AI market, especially as companies like Meta Platforms Inc offer significant salaries to recruit AI specialists. OpenAI CEO Sam Altman called Meta's recruitment "distasteful" The fierce competition for top-tier AI talent has intensified, with Meta Platforms aggressively recruiting key personnel from OpenAI. The most notable defection is Shengjia Zhao, a co-creator of ChatGPT and GPT-4, who has been named Chief Scientist of Meta's new Superintelligence Lab. TThis aggressive poaching has rattled OpenAI, with one of its research officers, Mark Chen, likening the situation to "a home invasion." In a message to his employees, OpenAI CEO Sam Altman called Meta's recruitment "distasteful" and warned that such a compensation-first strategy could lead to "very deep cultural problems." In response, OpenAI has taken measures to retain its talent, including offering special bonuses and allowing employees to sell shares in the company, which is valued at a whopping $500 billion in this recent secondary sale. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Villas For Sale in Dubai Might Surprise You Villas In Dubai | Search Ads Get Quote Undo SoftBank's growing stake and OpenAI's massive ambitions SoftBank is making a substantial bet on OpenAI's future. This new share sale would add to its previous commitments, including its plan to lead a $40 billion funding round that values the company at $300 billion. The Japanese conglomerate also recently completed a separate $1 billion purchase of employee shares at a $300 billion valuation. If the $500 billion valuation is finalized, it would make OpenAI the world's most valuable startup, surpassing Elon Musk 's SpaceX. The company's revenue is also projected to triple this year to $12.7 billion, a significant jump from $3.7 billion in 2024. OpenAI CEO Sam Altman has also signaled the company's massive ambitions, stating that it plans to spend trillions of dollars on the infrastructure needed to run AI services in the near future. "You should expect a bunch of economists to wring their hands and say, 'This is so crazy, it's so reckless,'...and we'll just be like, 'You know what? Let us do our thing,'" Altman said. AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Yahoo
01-08-2025
- Business
- Yahoo
Meta Platforms Just Hired One of ChatGPT's Co-Creators. Is META Stock a Buy Here as Zuckerberg Doubles Down on AI?
Mark Zuckerberg-led Meta Platforms (META) has appointed former OpenAI researcher Shengjia Zhao as the chief scientist of its Meta Superintelligence Labs, a new division within Meta, led by Zuckerberg's vision to create artificial general intelligence (AGI) that surpasses human capabilities. Touted for his significant contributions in building ChatGPT, GPT-4 and the company's first AI reasoning model, o1, Zhao joins a super team at Meta, where Zuckerberg has assembled some of the best minds in AI globally. Commenting about Zhao's addition to the team, Zuckerberg said, 'I'm excited to share that Shengjia Zhao will be the Chief Scientist of Meta Superintelligence Labs. Shengjia co-founded the new lab and has been our lead scientist from day one. Now that our recruiting is going well and our team is coming together, we have decided to formalize his leadership role.' Zhao will lead the research initiatives at the unit headed by Alexandr Wang, the founder of Scale, in which Zuckerberg invested an eye-watering $14 billion to acquire a 49% stake. More News from Barchart With UnitedHealth Under DOJ Investigation, Should You Buy, Sell, or Hold UNH Stock Now? Trump Won't Take Away Tesla's Subsidies. Does That Make TSLA Stock a Safe Buy Here? Can AMD Stock Hit $210 in 2025? Markets move fast. Keep up by reading our FREE midday Barchart Brief newsletter for exclusive charts, analysis, and headlines. Shares of Meta are up 32% on a YTD basis, and it boasts a market cap of about $1.8 trillion. Meta Posts a Blowout Q2 Meta's spending spree on high-profile hires and capex rollout to build its AI capabilities would make one think that it is coming at the expense of the company's financials. The reality is far from that. In the past 10 years, Meta's revenue and earnings have compounded at annual growth rates of 28.85% and 37.25%, respectively. Moreover, it has reported an earnings beat in each of the past nine quarters, including the latest Q2. In Q2 2025, Meta reported revenues of $47.5 billion, up 22% from the previous year. Core advertising revenues continued to drive overall topline growth, coming in at $46.6 billion, which marked a yearly rise of 21.5%. Earnings witnessed an even sharper yearly growth of 38% to $7.14 per share, well ahead of the consensus estimate of $5.92 per share. Encouragingly, operating margins improved as well to 43% from 38% in the year-ago period. Daily active people (DAP) and average price per ad rose by 6% to 3.48 billion and 9%, respectively. Net cash from operating activities increased by 32% from the previous year to $25.6 billion. However, free cash flow dropped to $8.55 billion from $10.9 billion in the prior year. The decline in cash flows should not be seen as a negative, instead it is transient and is a sign of the company's huge spending on data center infrastructure and hiring, which will ultimately drive growth in the future. For Q3, the management projects revenue to be in the range of $47.5 billion to $50.5 billion, the midpoint of which would denote yearly growth of 20.7%. Further, analysts are forecasting the company to report earnings of $6.49 per share compared to $6.03 per share in the year-ago period. Poised to Dominate the Consumer AI Space Meta's most compelling asset is its deeply ingrained presence globally, primarily via its flagship platforms WhatsApp, Instagram, and Facebook. This characteristic starkly differentiates the company from other hyperscalers such as Microsoft (MSFT), Amazon (AMZN), and Google (GOOGL), all of whom, despite their commitments to AI, remain primarily focused on enterprise solutions. Notably, Meta maintains a completely integrated, proprietary ecosystem, serving a staggering 3.5 billion active users, and concurrently operates what stands as the world's most extensive end-to-end AI-focused advertising platform. Equipped with these formidable resources, Meta's vision for personal superintelligence, its ambition to construct AI agents tailored for individuals, gives it a distinct competitive edge and unlocks an addressable market of truly gargantuan proportions. Furthermore, Meta finds itself in a unique position to monetize artificial intelligence without necessitating significant additional expenditure. In fact, the company is already leveraging AI to generate revenue within its foundational business activities, including the precision of its advertising, the efficacy of its user targeting, and the insightful analysis of consumer behavior. This ongoing monetization is occurring simultaneously with the development of its underlying AI infrastructure, largely obviating the need to re-engineer existing systems, a direct benefit derived from its Llama3 large language model. Analysts are unsurprisingly projecting industry-beating growth rates for Meta with forward revenue and earnings growth rates pegged at 16.82% and 24.60% compared to the sector medians of 3.47% and 12.73%, respectively. Analyst Opinions on META Stock Overall, analysts have given a consensus rating of 'Strong Buy' for META stock, with a mean target price of $757.98. This is slightly below its current trading price. Out of 54 analysts covering the stock, 45 have a 'Strong Buy' rating, three have a 'Moderate Buy' rating, five have a 'Hold' rating, and one has a 'Strong Sell' rating. On the date of publication, Pathikrit Bose did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
NDTV
01-08-2025
- Business
- NDTV
Meta Stock Soars 12% After Crushing Earnings and Unveiling Huge AI Plans
Meta Platforms Inc (META) shares surged 12% on Thursday morning after the company reported better-than-expected second-quarter earnings and gave an optimistic outlook for the third quarter, according to a news release by the social media giant. For Q2, Meta posted earnings per share (EPS) of $7.14 and revenue of $47.5 billion. Analysts had expected EPS of $5.89 and revenue of $44.83 billion. This marks a strong improvement from the same period last year, when the company reported EPS of $5.16 and revenue of $39.07 billion. As per the company's report, Meta's advertising revenue reached $46.5 billion, surpassing the forecast of $44.07 billion. Meanwhile, its Reality Labs division, which focuses on virtual and augmented reality, reported a loss of $4.5 billion, slightly better than the expected $4.8 billion loss. Looking ahead, Meta expects third-quarter revenue between $47.5 billion and $50.5 billion, higher than Wall Street's projection of $46.2 billion. The strong earnings come as Meta increases investment in artificial intelligence. CEO Mark Zuckerberg recently appointed Shengjia Zhao, a former OpenAI researcher, as the head of its new Superintelligence Lab. Meta has also made major hires from companies like GitHub, Safe Superintelligence, Apple, and Scale AI-where it invested $14.3 billion and recruited CEO Alexandr Wang. Additionally, Meta is heavily investing in AI infrastructure. Zuckerberg announced that the company will spend hundreds of billions of dollars building several multi-gigawatt data centres across the U.S., including one called "Hyperion," which will eventually reach 5 gigawatts of capacity.
