Yahya 
Said to be in negotiations with venture capital firms for a substantial additional round of funding, artificial intelligence startup OpenAI may increase the company’s value above $100 billion. According to an August 28 Wall Street Journal story, software titan Microsoft is also expected to be present and Thrive Capital is planned to invest $1 billion in the round.
OpenAI’s most significant funding influx would be Microsoft’s $10 billion pledge in January 2023. Having invested $13 billion in OpenAI since 2019, Microsoft currently controls 49% of the business. Internal data obtained by the Wall Street Journal suggests that the latest financing round most valued OpenAI at or over $103 billion.
Earlier this year OpenAI signed a deal allowing staff members to sell their stakes in the firm, therefore covertly pricing the company at more than $86 billion. Although OpenAI attracts a lot of money, its financial status raises doubts. Though the company’s annual revenue is around $3.4 billion, forecasts show it might lose up to $5 billion in 2024, therefore depleting its cash reserves in one year.
Commentators have criticised OpenAI’s business strategy; tech journalist Ed Zitron has defined the company’s path to profitability as “untenable”. Based on Zitron, OpenAI would have to create more wealth than any company in history if it were to survive till 2026.
As OpenAI is still a charity, its investors do not possess private shares. Instead, they support a for-profit subsidiary known OpenAI LP, which entitles them to a share of income once a pre-defined ceiling is exceeded.
It’s important to note that the information regarding a potential new funding of OpenAI has emerged at the time when competition between companies in the industry of AI has intensified. Google is out with its AI known as Gemini, while Amazon partnered with it to invest $6bn in Anthropic, which has developed the chatbot called Claude. At the same time Meta also advanced more of its AI projects such as its open source large language model dubbed Llama 3. 1.
The recent funding activities to capitalize fresh funds, indicate the intensification of competition in the AI industry, especially by OpenAI.
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