OpenAI Scores $80 Billion Value – Upcoming IPO?

Daily Profit Investing Research
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$80 billion.

That’s the current value of OpenAI – the startup that sparked the Artificial Intelligence revolution.

It marks a 175% increase in the company’s valuation since January.

Lots of folks thought Microsoft (NASDAQ: MSFT) was crazy in January.

That’s when the tech giant invested an additional $10 billion in OpenAI – bringing its total investment to $13 billion. In exchange, Microsoft now owns 49% of the world’s leading AI company.

Fast forward to today…

OpenAI is currently valued at $80 billion, according to The Wall Street Journal. That means Microsoft’s investment is now worth over $39 billion.

That may seem like a huge gain – and it is.

Yet it’s simply a rounding error for a company of Microsoft’s size. After all – Microsoft is worth $2.45 trillion.

That means the OpenAI investment equals just 1.6% of Microsoft’s market value.

Rapid growth at OpenAI is sending the company’s value soaring.

Last year, the company’s sales were just $28 million.

OpenAI is now pulling in over $80 million per month in sales – putting the company on track for over $1 billion in annual sales.

Recent reports suggest that sales will reach multiple billions next year.

OpenAI is now the 3rd most valuable private company in the world. The only two larger companies include TikTok parent ByteDance ($225 billion) and SpaceX ($150 billion).

Microsoft isn’t the only one investing billions private AI tech companies…

Amazon (NASDAQ: AMZN) just invested $4 billion in an AI startup called Anthropic (private). And Alphabet (NASDAQ: GOOG) previously invested $300 million in the company.

Anthropic has an AI chatbot called Claude.AI that competes with OpenAI’s ChatGPT. And it’s estimated that Anthropic is valued at more than $20 billion.

Big Tech Backdoor to Avoid FTC Approval

America’s big tech stocks are getting creative when it comes to deal making.

Typically, companies like Amazon, Google or Microsoft would buy up promising tech startups like OpenAI or Anthropic.

However, President Biden’s FTC is led by Lina Khan. Her mission is reign in the big tech companies and limit their dominance. This means the FTC will critically review any acquisitions from the big tech stocks.

That’s why the big tech stocks NOT simply buying 100% of OpenAI or Anthropic. Instead, Amazon is buying a 25% stake in Anthropic. And Microsoft is buying a 49% stake in OpenAI.

These deals don’t require FTC approval – since they are buying a minority stake.

These deals provide two main benefits for the big tech companies.

  1. Investment Upside: they own a stake in the newest AI startups. The valuations of these companies grow as AI goes mainstream.
  2. Technology Partnership: they get access to this new technology and can partner. One example is that Microsoft is using OpenAI’s ChatGPT with its Bing search engine and with Office 365.

Right now, it’s impossible for YOU to directly buy shares of OpenAI or Anthropic.

It’s possible that OpenAI will consider an Initial Public Offering (IPO) in 2024. However, the vast majority of the profits will be made by the early investors who bought private Pre-IPO shares.

Yours in Wealth,

Ian Wyatt

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