Search icon
Download the all-new Republic app:
NIFTY 50 23,587.50 Down stock -364.20 (-1.52%)
NIFTY 100 24,448.85 Down stock -436.10 (-1.75%)
NIFTY 500 22,319.40 Down stock -432.75 (-1.90%)
NIFTY MIDCAP 50 15,881.10 Down stock -441.65 (-2.71%)
INDIA VIX 15.07 up stock 0.56 (3.87%)
NIFTY MIDCAP 150 21,050.60 Down stock -520.70 (-2.41%)
NIFTY SMALLCAP 50 8,925.85 Down stock -252.60 (-2.75%)
NIFTY BANK 50,759.20 Down stock -816.50 (-1.58%)
NIFTY AUTO 22,580.00 Down stock -490.90 (-2.13%)
NIFTY FMCG 55,600.80 Down stock -557.10 (-0.99%)
NIFTY IT 43,771.05 Down stock -1183.10 (-2.63%)
NIFTY MEDIA 1,887.90 Down stock -32.60 (-1.70%)
NIFTY METAL 8,813.25 Down stock -163.95 (-1.83%)
NIFTY PHARMA 22,501.85 Down stock -196.05 (-0.86%)
NIFTY PRIVATE BANK 24,617.60 Down stock -438.70 (-1.75%)
NIFTY REALTY 1,060.10 Down stock -43.15 (-3.91%)
NIFTY OIL & GAS 10,607.60 Down stock -177.55 (-1.65%)
NIFTY COMMODITIES 8,188.45 Down stock -160.75 (-1.93%)
NIFTY ENERGY 34,910.60 Down stock -717.60 (-2.01%)
LEADMINI 188 up stock 0.20 (0.11%)
ZINCMINI 261.25 up stock 0.25 (0.1%)
SILVERMIC 89730 up stock 72.00 (0.08%)
GOLDGUINEA 59188 up stock 50.00 (0.08%)
GOLDM 72900 up stock 28.00 (0.04%)
COTTONCNDY 56540 up stock 20.00 (0.04%)
SILVER 89675 up stock 29.00 (0.03%)
CRUDEOIL 6609 Down stock -237.00 (-3.46%)
NATURALGAS 177.5 Down stock -0.30 (-0.17%)
NATGASMINI 177.5 Down stock -0.30 (-0.17%)
MENTHAOIL 942.2 Down stock -1.20 (-0.13%)
ZINC 260.7 Down stock -0.25 (-0.1%)
ALUMINIUM 220.5 Down stock -0.20 (-0.09%)
LEAD 187 Down stock -0.10 (-0.05%)
NIFTY 50 23,587.50 Down stock -364.20 (-1.52%)
NIFTY 100 24,448.85 Down stock -436.10 (-1.75%)
NIFTY 500 22,319.40 Down stock -432.75 (-1.90%)
NIFTY MIDCAP 50 15,881.10 Down stock -441.65 (-2.71%)
INDIA VIX 15.07 up stock 0.56 (3.87%)
NIFTY MIDCAP 150 21,050.60 Down stock -520.70 (-2.41%)
NIFTY SMALLCAP 50 8,925.85 Down stock -252.60 (-2.75%)
NIFTY BANK 50,759.20 Down stock -816.50 (-1.58%)
NIFTY AUTO 22,580.00 Down stock -490.90 (-2.13%)
NIFTY FMCG 55,600.80 Down stock -557.10 (-0.99%)
NIFTY IT 43,771.05 Down stock -1183.10 (-2.63%)
NIFTY MEDIA 1,887.90 Down stock -32.60 (-1.70%)
NIFTY METAL 8,813.25 Down stock -163.95 (-1.83%)
NIFTY PHARMA 22,501.85 Down stock -196.05 (-0.86%)
NIFTY PRIVATE BANK 24,617.60 Down stock -438.70 (-1.75%)
NIFTY REALTY 1,060.10 Down stock -43.15 (-3.91%)
NIFTY OIL & GAS 10,607.60 Down stock -177.55 (-1.65%)
NIFTY COMMODITIES 8,188.45 Down stock -160.75 (-1.93%)
NIFTY ENERGY 34,910.60 Down stock -717.60 (-2.01%)
LEADMINI 188 up stock 0.20 (0.11%)
ZINCMINI 261.25 up stock 0.25 (0.1%)
SILVERMIC 89730 up stock 72.00 (0.08%)
GOLDGUINEA 59188 up stock 50.00 (0.08%)
GOLDM 72900 up stock 28.00 (0.04%)
COTTONCNDY 56540 up stock 20.00 (0.04%)
SILVER 89675 up stock 29.00 (0.03%)
CRUDEOIL 6609 Down stock -237.00 (-3.46%)
NATURALGAS 177.5 Down stock -0.30 (-0.17%)
NATGASMINI 177.5 Down stock -0.30 (-0.17%)
MENTHAOIL 942.2 Down stock -1.20 (-0.13%)
ZINC 260.7 Down stock -0.25 (-0.1%)
ALUMINIUM 220.5 Down stock -0.20 (-0.09%)
LEAD 187 Down stock -0.10 (-0.05%)
OPINION

Published 19:30 IST, August 29th 2024

OpenAI’s mooted $100 bln value is relatively sober

The company backed by Microsoft is in talks to raise new money from investors.

Reuters Breakingviews
Karen Kwok
SearchGPT is OpenAI's debut in the search engine market | Image: Freepik

For good reason. A more than $100 billion valuation for OpenAI would look massive in the world of venture capital investing. But it would only be a modest bump from the level at which the maker of ChatGPT was valued back at its last funding round in February. The surprisingly sober increase makes sense.

The company backed by Microsoft is in talks to raise new money from investors, the Wall Street Journal reported on Wednesday citing people familiar with the matter. Its last funding round, which closed in February, saw its valuation more than double to $86 billion. Assuming it hits the lower end of its target this time, the increase would be a modest 16%. AI darling Nvidia’s shares have risen by 73% over the same period, as of Wednesday’s close. A basket of technology stocks including Nvidia, Microsoft, Alphabet, Amazon, Meta, Palantir and Apple is up 21%, according to Breakingviews calculations.

OpenAI’s business is growing fast as well. The company has achieved monthly revenue of $283 million and is expecting sales of between $3.5 billion and $4.5 billion in 2024, according to a July report by The Information. If it hits the midpoint of that range, OpenAI will have grown revenue by a whopping 300% this year. A $100 billion valuation would equate to 25 times 2024 revenue, half the level Nvidia was trading at on Wednesday, according to analysts’ estimate polled by LSEG.

But there are good reasons for the seemingly pedestrian valuation increase. The company led by Sam Altman has faced an exodus of senior executives according to media reports, including co-founder John Schulman, who joined OpenAI’s rival Anthropic. It needs to invest heavily in smarter AI models. And hope that part-owner Microsoft might buy it is fading, given likely opposition from antitrust watchdogs. The group led by Satya Nadella gave up a board seat in July.

Competition has also increased. Google’s DeepMind, Elon Musk’s xAI, Amazon-backed Anthropic and Meta are building smaller but effective AI models. OpenAI’s ChatGPT still holds top spot on the AI industry scoreboard Lmsys Chatbot Arena, but its rivals are catching up fast, and flush with cash. Musk’s xAI raised $6 billion in May from investors valuing it at $24 billion. Nvidia’s valuation is helped by the fact that its chips have limited rivals. Unfortunately for OpenAI, its customers have plenty of options to choose from.

Updated 19:30 IST, August 29th 2024

LIVE TV

Republic TV is India's no.1 English news channel since its launch.