3X boost for Open AI's valuation

Investment firm Thrive Capital is leading a deal to buy shares from OpenAI employees. The deal would boost OpenAI's valuation to at least $80 billion, more than triple its valuation just 6 months ago.

What’s going on here?

Thrive Capital is leading the share buyback for OpenAI’s latest round.

What does this mean?

After making $28 million in revenue last year, OpenAI’s annualized revenue now tops $1.3 billion. Still, this new investment in OpenAI values the startup at over 60 times its annualized revenue. Thrive Capital also invested in OpenAI at its $27 billion valuation in April and now the latest deal will boost OpenAI's valuation over 3 times in just 6 months.

This enormous new valuation suggests investors expect OpenAI will continue raising huge new funding rounds. Rumours are that Sam Altman wants to raise $100 billion to develop advanced AI. While some investors are wary of overpaying, others are eager to get a piece of the red-hot AI startup.

Why should I care?

OpenAI's exploding valuation reveals just how much promise investors see in artificial intelligence. ChatGPT's viral success proves consumer appetite for AI is real. I wonder how long OpenAI is considered a “startup”.