ChatGPT creator OpenAI is in talks to sell shares in a tender offer that would double the startup's valuation to $29 billion
Photo illustration by Jakub Porzycki/NurPhoto via Getty Images
- OpenAI is in talks to sell shares of its company in a tender offer, according to the Wall Street Journal.
- A tender offer is a bid to purchase some or all of shareholders' stocks in a company.
- If the deal goes through, OpenAI would be one of the most valuable US startups despite generating minimal revenue.
The year has started off strong for ChatGPT, the viral new chatbot that uses artificial intelligence to write essays, cover letters, and may ultimately give Google a run for its money as a search engine.
According to the Wall Street Journal, OpenAI, the startup behind ChatGPT, is in talks to sell existing shares of its company in a tender offer that would value the company at $29 billion.
Venture capital firms Thrive Capital and Founders Fund are in talks to invest in the deal, and their investment would total at least $300 million in share sales, the Journal reported citing people familiar with the matter.
A tender offer is one in which investors buy shares from existing shareholders. In this case, that includes OpenAI's employees, the Journal reported.
Tender offers are typically made publicly and set a specific window of time for shareholders to sell. Oftentimes, shareholders are offered a price above the market price for the shares.
No deal has been reached yet and the terms of the deal might be subject to change, the Journal reported. However, if the deal does go through it would make OpenAI one of the most valuable US startups even though it hasn't generated much revenue, it also reported.
Amid a chilly environment where venture capital investors have largely pulled back from funding new startups, OpenAI would also be one of the few startups to raise money at a higher valuation on the private market, according to the Journal.
OpenAI is also the company behind Dall-E 2, the artificial intelligence based image-generating platform.
A spokesperson for OpenAI told Insider that the company is not commenting on the deal.