OpenAI closes $80 billion deal

OpenAI closed a deal that values the AI company at $80 billion or more in less than 10 months and nearly doubles its value, the New York Times reported.

The company is selling its existing shares in a tender offer led by venture capital firm Thrive Capital.

The deal allows employees to sell shares of their company instead of conducting a traditional financing round aimed at raising money for business operations.

OpenAI is now one of the world's most valuable tech startups, behind ByteDance and SpaceX, according to data tracking firm CB Insights.

This deal is another example of Silicon Valley doling out money to a few companies that specialize in generating artificial intelligence.

The deal comes at a critical time for the company and restores confidence after a year of controversy.

In November, the company's board of directors fired Sam Altman; The firing sparked a chaotic week in which employees threatened to quit in solidarity with Altman as the board lost confidence in his leadership.

Altman returned to office and several board members resigned.

OpenAI has appointed law firm WilmerHale to review the board's conduct to resolve the chaos that emerged last year. WilmerHale plans to complete its report early this year.

The company concluded a similar deal early last year.

Venture capital firms Thrive Capital, Sequoia Capital, Andreessen Horowitz and K2 Global have agreed to buy shares of OpenAI in a tender offer that values the company at about $29 billion.

Investors are keen to invest their money in AI companies. Last January, Microsoft invested $10 billion in OpenAI, bringing the total investment in the startup to $13 billion.

Last November, while OpenAI was negotiating a new deal, the board suddenly fired Altman.

The potential deal casts a shadow over Altman's efforts to negotiate a return to the company the following week.

More than 700 of the company's approximately 770 employees signed a petition calling for Altman to be reinstated.



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