open AIThe startup behind the widely used conversational AI model ChatGPT, has closed its new round of funding of more than $10.3 billion, TechCrunch has learned.
Venture capital firms including Tiger Global, Sequoia Capital, Andreessen Horowitz, Thrive and K2 Global are in the round, according to documents seen by TechCrunch. A source tells us that Founders Fund is also investing. In all, venture capitalists have put in just over $300 million at a valuation of $27 billion to $29 billion. This is coupled with a large investment from Microsoft. announced earlier this yeara person familiar with the development told TechCrunch. The size of Microsoft’s investment is believed to be around $10 billion, a figure we confirmed with our source.
If all this is true, this is the closing round that the Wall Street Journal reported It was under construction in January. We confirm that this is when the discussions started, amid a viral surge of interest in OpenAI and its business.
While Microsoft’s investment comes with a strong strategic angle — the tech giant is working to integrate OpenAI’s technology into various areas of its business — VCs are coming in as financial backers.
From what we understand, the investors have signed the term sheets and the money has been transferred; yet to come is the signing of OpenAI. The plan was to make this investment public next week.
In total, outside investors now own more than 30% of OpenAI.
Based on PitchBook data, it appears that Peter Thiel had already been a backer, but it appears this is the first time the Founders Fund will invest; K2 Global, a one-partner firm, Ozi Amanat, and Thrive are also first-time backers of the startup. Based on PitchBook data, it appears that Sequoia, A16Z, and Tiger Global had all been previous investors in the company, but sold stakes; this latest investment would bring them back.
a number of companies including tiger and Redwood, has had some blows as a result of the financial crisis that the technology sector has experienced in the last year; in general, a number of venture capitalists have greatly reduced their pace of investment, sitting in the so-called “dry dust” waiting for better weather and perhaps better opportunities.
So at a time when investors are on the lookout for interesting AI startups to backOpenAI probably looks like the kind of opportunity that looks good right now.
“They are probably trying to use this [funding] say, hey look, we found a golden apple,” a source said of the decision to back OpenAI in the here and now. “Venture is a very strange place where anything can happen. You can come back big, big, big, anytime.”
OpenAI has an army of technical teams working in a variety of areas, but the area that has garnered a lot of attention lately is GPT, short for Generative Pre-trained Transformer, which is OpenAI’s family of large language models used by third parties. by form of API.
There is also ChatGPT, the generative artificial intelligence service that OpenAI launched in late November 2022 based on GPT that allows anyone to type a natural question and get a convincing and detailed answer. ChatGPT has been a certifiable success, with over a billion visitors to its website in February, it says SimilarWeb – and that doesn’t include those who use that technology through third parties.
Generative AI is all the rage right now, but OpenAI has its controversies, too, with many focused on that consumer-oriented ChatGPT product. People have wondered if liesif is one “virus“, how it is handeled privacyif it can be manipulated to be toxiceither commit defamation; and in the wake of many more rushing into AI development, including the very nature of how”open“OpenAI’s GPT branding will be in the longer term has come up for discussion.
To be fair, OpenAI has recognized the work that still needs to be done, and in the meantime continues to develop services and iterate. In February, the commissioning introduced a paid version of ChatGPT, called ChatGPT Plus with a faster user experience. Was updated with multimodal LLM GPT-4 in March.
The key to the proposal, the valuation of OpenAI, and the potential interest from investors is that, along with the technology, there is also a rapidly developing ecosystem around that technology.
In addition to the hundreds of millions of people who have played with ChatGPT, hundreds of companies large and small have begun to implement GPT and ChatGPT into their products and services. That has also been a spur for other big tech companies to speed up the rollout of their own generative AI efforts. Google has released Bard and Meta also introduced Calls to take on GPT with his proprietary LLM.
OpenAI, however, has a certain undeniable gravity amid the competition, not least because of its singular focus on the AI space since its founding in 2015. That’s been even as it’s gone through some significant changes, including Changing from its original non-profit model. we do not In fact Whether AI will precipitate the seismic shift many say it will, but as one person said: OpenAI may be the closest we have to a winner in the space right now.
“We’ve been working on it for so long, but we’re getting more and more confident that it’s really going to work,” co-founder and CEO Sam Altman said at an AI conference earlier this month. “We have been [building] the company for seven years. These things take a long, long time. I would say broadly in terms of why it worked when others haven’t: it’s just because we’ve been working hard sweating every single detail for a long time. And most people aren’t willing to do that.”
In addition to ChatGPT, OpenAI has its AI-based image generation tool called Dall-E which received a significant update in July of last year. It also features the Whisper AI voice recognition model.
Microsoft’s efforts have included integrating the OpenAI APIs with its Azure infrastructure to support the computational requirements of the models. also in march Announced a GPT-4 integration to power Bing, part of Microsoft’s long-standing efforts to make a dent in the dominance of Google’s search services.
We’ve reached out to the investors mentioned here, as well as OpenAI, for comment and will update this story as we learn more.
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