OpenAI Valuation Soars to $500 Billion

Watch OpenAI Valuation Soars to $500 Billion - Bloomberg on Dailymotion

Transcript

00:00Extraordinary scoop that first came in August. Now we get the real details and perhaps those

00:05current employees and former employees not selling as much as they could have done.

00:10That's right. So, you know, again, this is a record valuation for OpenAI and for just startups

00:16right now, surpassing SpaceX as the most highly valued startup. That being said, there was more,

00:23there could have been more units sold is what we're told. And actually employees chose not to

00:31take up all of that potential share sale. So, you know, it could indicate that employees are feeling,

00:38you know, optimistic about the future of the company and that their valuation could go even

00:44higher. But of course, this is an ongoing story and there are still a lot of uncertainties as well

00:49in OpenAI's future, including its ability to go forward with the restructure.

00:54When there is a tender or a secondary or any kind of financial transaction, Shireen,

00:59there's always a data room. Just take my word for it. And so I find the group of investors here

01:04really interesting. Third parties that were able to buy those shares from employees.

01:08Just run us through the list and any that caught your eye.

01:12That's right. So many of them were expected. We have Thrive, also a former large investor as well

01:17as SoftBank, another major partner. We also have Abu Dhabi MGX, Dragoneer and T. Rowe. And,

01:25you know, MGX is an interesting one given we're seeing more money coming in from overseas,

01:30from the Middle East and to AI companies. And, you know, this is just an ongoing,

01:37as I find in AI, once one investment closes, it's the beginnings of another one. So

01:41we can expect these sizes to just get bigger and bigger in terms of funds going in and shares

01:49being sold. I mean, that's what's extraordinary is the fact that they raised money, fresh money,

01:54from SoftBank back in March. And the valuation has just spiraled even since then, Shireen,

01:59even as, for a minus of the data and the fundamentals, the company remains unprofitable.

02:04And at the moment, revenues tiny in comparison to, say, Netflix, which is also worth about $500

02:09billion. That's right. So while we're seeing the revenue increase rapidly, they have something

02:15like 700 million users. At the same time, the company is also unprofitable. And that's because

02:22of, you know, the large costs to fuel, basically, the development of AI. There's huge data compute

02:31costs. There are these unprecedented data centers that they're building out. There are, you know,

02:36researchers, all of that takes a lot of money. So it's still a highly capital intensive and

02:41unprofitable business, even though the revenue is growing at a very fast rate.