Immediately after the artificial intelligence (AI) company OpenAI announced its plans for an internal stock offering, the company’s valuation skyrocketed to $86 billion.
In this announcement, the public offering opportunity allows employees and current shareholders of the company to convert their shares into cash. Notably, the aerospace giant SpaceX, led by Elon Musk, executed a similar strategy in June, boosting the company’s valuation to approximately $150 billion.
For OpenAI, this move marks another significant milestone in its journey toward success. The company’s valuation has more than doubled in just two years, reaching $30 billion from a valuation of $14 billion in 2021.
If successful in raising new funding, its valuation would surpass well-established financial companies like Stripe, while still trailing behind Musk’s SpaceX and ByteDance, the parent company of TikTok.
Furthermore, recent reports indicate that OpenAI is the most well-funded AI company this year. The AI company received a $10 billion investment from Microsoft at the beginning of 2023, followed by an additional $300 million in funding from venture capital firms such as Sequoia Capital, Andreessen Horowitz, and others.
The substantial funding injection is primarily driven by the outstanding performance of ChatGPT. ChatGPT generates responses based on text prompts with a level of nuance and creativity that far exceeds typical chatbots.
This success has paved the way for competing products like Anthropic’s Claude and Google’s Bard. However, OpenAI’s ChatGPT still maintains its leadership position in the industry as it actively develops new products and introduces features to stay at the forefront.
Additionally, the company is on track to generate $1 billion in annual revenue as more businesses adopt its technology.