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Yahoo
2 days ago
- Business
- Yahoo
OpenAI in talks for share sale at $500 bil valuation
A secondary sale for OpenAI could serve as a way to incentivise staff to remain at the company who are being offered lavish compensation. OpenAI is in early talks about a potential sale of stock for current and former employees at a valuation of about US$500 billion ($643.6 billion), people briefed on the investment discussions said, marking an enormous gain in value for the artificial intelligence leader. The company is targeting a secondary stock sale in the billions of dollars, the people said, asking to remain anonymous because they weren't authorised to discuss the matter publicly. Existing investors including Thrive Capital have approached OpenAI about buying some of the employee shares, the people said. If the deal goes ahead, it would elevate OpenAI's on-paper price tag by roughly two-thirds. Its previous valuation stood at US$300 billion in a US$40 billion financing round led by SoftBank Group — making it one of the largest privately held companies in the world. Representatives for OpenAI and Thrive declined to comment. The latest move follows news last week the start-up had secured US$8.3 billion from a syndicate of investors for a second tranche of that US$40 billion financing, which was oversubscribed by about five times, according to one of the people briefed on the discussions. OpenAI managed to snag that funding ahead of schedule, the person said. Major US start-ups often negotiate share sales for their employees as a way to reward and retain staff, and also attract external investors. The company run by Sam Altman is looking to leverage investor demand to provide employees with liquidity that reflects the company's growth, according to one of the people familiar with the investment negotiations. In recent months, OpenAI lost several members of its research staff to Meta Platforms as the latter firm aggressively recruited top talent from Apple and other competitors for its 'superintelligence' AI team, offering pay packages in the nine-figure range. A secondary sale for OpenAI could serve as a way to incentivise staff to remain at the company who are being offered lavish compensation. OpenAI, whose ChatGPT ushered in a new era of AI development, has overseen a spate of major recent technology launches. Those include a pair of open and freely available artificial intelligence models that can mimic the human process of reasoning, months after China's DeepSeek gained global attention with its own open AI software. It's now preparing the release of its latest GPT-5 model, aimed at shoring up OpenAI's lead in an increasingly competitive sphere. The start-up has announced it expects ChatGPT to reach 700 million weekly active users this week, up from 500 million at the end of March. The app also recently crossed 3 billion user messages a day. And in May, it unveiled plans to acquire the AI device start-up co-founded by Apple veteran Jony Ive in a nearly US$6.5 billion all-stock deal, joining forces with the legendary designer to make a push into hardware. It's also facing a number of challenges. OpenAI's currently in separate discussions about its future as a for-profit company, a negotiation that's dragged on for months. Microsoft, which backed OpenAI with some US$13.75 billion and has the right to use its intellectual property, is the biggest holdout among the ChatGPT maker's investors, Bloomberg previously reported. At issue is the size of Microsoft's stake in a newly configured company. The talks have since broadened into a renegotiation of their relationship, with the software maker seeking to avoid suddenly losing access to the start-up's technology before the end of the current deal, which expires in 2030. See Also: Click here to stay updated with the Latest Business & Investment News in Singapore OpenAI snags US$200 mil contract with US Defense Department Singapore taps on AI to detect fractures, tuberculosis and streamline public healthcare delivery Microsoft is key holdout for OpenAI restructuring plan Read more stories about where the money flows, and analysis of the biggest market stories from Singapore and around the World Get in-depth insights from our expert contributors, and dive into financial and economic trends Follow the market issue situation with our daily updates Or want more Lifestyle and Passion stories? Click hereError 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
CNBC
3 days ago
- Business
- CNBC
OpenAI's Altman is still looking to spend after GPT-5 launch and is 'willing to run the loss'
OpenAI CEO Sam Altman on Friday said the artificial intelligence company should prioritize growth and its investments in training and compute "for a long time," even if it delays its path to profitability. Last year, OpenAI was expecting about $5 billion in losses on $3.7 billion in revenue. OpenAI's annual recurring revenue is now on track to pass $20 billion this year, but the company is still losing money. "As long as we're on this very distinct curve of the model getting better and better, I think the rational thing to do is to just be willing to run the loss for quite a while," Altman told CNBC's "Squawk Box" in an interview Friday following the release of GPT-5. GPT-5 is the company's latest and most advanced large-scale AI model and was released on Thursday. The model is available to everyone, including free users, and OpenAI said it's smarter, faster and "a lot more useful," particularly across domains like writing, coding and health care. Earlier this week, OpenAI released two open-weight language models for the first time since it rolled out GPT-2 in 2019. Those models were built to serve as lower-cost options that developers, researchers and companies can easily run and customize. These models are expensive to develop and build. But investors don't seem to mind. OpenAI is currently in talks with investors about a potential stock sale at a valuation of roughly $500 billion, as CNBC previously reported. Thrive Capital, an investor in OpenAI, could lead the potential round. Altman said if OpenAI wanted to, it could become profitable sooner than he originally thought. But for now, since the private company remains free from the pressures of the public markets, it will continue to spend on training and compute. "It's nice not to be public," Altman said.
RTÉ News
4 days ago
- Business
- RTÉ News
OpenAI eyes $500 billion valuation in potential employee share sale, source says
ChatGPT maker OpenAI is in early-stage discussions about a stock sale that would allow employees to cash out and could value the company at about $500 billion, a source familiar with the matter said. That would represent an eye-popping bump-up from its current valuation of $300 billion, with the sale underscoring both OpenAI's rapid gains in users and revenue as well as the intense competition among artificial intelligence firms to secure talented workers. The transaction, which would come before a potential IPO, would allow current and former employees to sell several billion dollars worth of shares, said the source, who requested anonymity because the talks are private. Bolstered by its flagship product ChatGPT, OpenAI doubled its revenue in the first seven months of the year, reaching an annualized run rate of $12 billion, and is on track to reach $20 billion by year-end, the source added. Microsoft-backed OpenAI has about 700 million weekly active users for its ChatGPT products, a surge from about 400 million in February. The share sale talks come on the heels of OpenAI's primary funding round announced earlier this year, which aims to raise $40 billion, led by Japan's SoftBank Group 9984.T. SoftBank has until the end of the year to fund its $22.5 billion portion of the round, but the remainder has been subscribed at a valuation of $300 billion, the source said. Tech giants are competing aggressively for AI talent with lucrative compensation packages. Meta is notably investing billions in Scale AI to poach its 28-year-old CEO, Alexandr Wang, so that he can lead its new super intelligence unit. Unlisted firms such as ByteDance, Databricks and Ramp have also used private share sales to help update a company's valuation and reward long-term employees. Existing investors in OpenAI, including Thrive Capital, are in discussions to participate in the employee share sale, the source said. Thrive Capital declined to comment. Bloomberg first reported the potential sale. OpenAI is working on a significant corporate restructuring that would move away from its current capped-profit model and open the door for an initial public offering in the future. Chief Financial Officer Sarah Friar said in May, however, that an IPO would only come when the company and markets were ready.
Canada News.Net
4 days ago
- Business
- Canada News.Net
OpenAI explores $500 billion valuation in potential stock sale deal
SAN FRANCISCO, California: OpenAI is exploring a new stock sale that could allow employees to cash out while pushing the company's valuation to around US$500 billion, according to a person familiar with the talks. The potential sale is still in early stages, the source said, adding that existing investors, including Thrive Capital, are in discussions to participate. The person requested anonymity as the talks are private. If finalized, the deal would mark a sharp jump from OpenAI's current $300 billion valuation. The artificial intelligence company, backed by Microsoft, has seen rapid growth fueled by the popularity of its ChatGPT chatbot and ongoing enterprise partnerships. The share sale would offer employees a way to monetize their equity at a time when competition for AI talent is intensifying. Tech giants like Meta are reportedly offering highly attractive pay packages to lure top researchers and engineers.
The Star
5 days ago
- Business
- The Star
OpenAI in talks for share sale at US$500bil valuation
If the deal goes ahead, it would elevate OpenAI's on-paper price tag by roughly two-thirds. — Reuters NEW YORK: OpenAI is in early talks about a potential sale of stock for current and former employees at a valuation of about US$500bil, people briefed on the investment discussions said, marking an enormous gain in value for the artificial intelligence leader. The company is targeting a secondary stock sale in the billions of dollars, the people said, asking to remain anonymous because they weren't authorised to discuss the matter publicly. Existing investors, including Thrive Capital, have approached OpenAI about buying some of the employee shares, the people said. If the deal goes ahead, it would elevate OpenAI's on-paper price tag by roughly two-thirds. Its previous valuation stood at US$300bil in a US$40bil financing round led by SoftBank Group Corp, making it one of the largest privately held companies in the world. Representatives for OpenAI and Thrive declined to comment. The latest move follows news last week the startup had secured US$8.3bil from a syndicate of investors for a second tranche of that US$40bil financing, which was oversubscribed by about five times, according to one of the people briefed on the discussions. OpenAI managed to snag that funding ahead of schedule, the person said. Major US startups often negotiate share sales for their employees as a way to reward and retain staff, and also attract external investors. The firm run by Sam Altman is looking to leverage investor demand to provide employees with liquidity that reflects the company's growth, according to one of the people familiar with the negotiations. In recent months, OpenAI lost several members of its research staff to Meta Platforms Inc as the latter firm aggressively recruited top talent from Apple Inc and other competitors for its 'superintelligence' AI team, offering pay packages in the nine-figure range. A secondary sale for OpenAI could serve as a way to incentivise staff to remain at the company who are being offered lavish compensation. — Bloomberg
