The creator of ChatGPT seeks additional financial resources.
The innovator behind ChatGPT has set their sights on a staggering $100 billion valuation for their company, OpenAI, as per latest reports. So far, the primary source of funding for OpenAI has been tech giant Microsoft, which is believed to have pumped in over $10 billion, according to various sources. This upcoming funding round is being spearheaded by Thrive Capital, who aim to invest $1 billion, according to the "Wall Street Journal" and other reliable sources, quoting inside sources. Microsoft is also reportedly planning to contribute again, although the specifics are yet to be finalized, as per Bloomberg's financial service.
The valuation in such funding rounds is directly proportional to the share of the company that investors receive in exchange for their investment. Before its 2012 IPO, Facebook was also valued in a similar range. However, many other startups have struggled to maintain their billion-dollar valuations in the long run.
The AI Arms Race Consumes Billions
ChatGPT has been at the center of the AI hype for over a year now. These AI models are trained on extensive data and are capable of generating human-like text, coding software, and summarizing data. They essentially predict the next word in a sentence based on the previous words.
In recent times, there's been a fierce AI competition in Silicon Valley. Training such software requires significant computer infrastructure and can lead to billions in expenditure. This is a sum that most tech giants, such as Google, Facebook's Meta, and others, can afford due to their immense resources. Apart from investing in their own AI models, these tech giants are also investing in startups. For instance, Anthropic, a significant competitor to OpenAI with the chatbot Claude, has received billions of dollars from Google and Amazon, amongst others.
The success of companies like OpenAI in the AI field significantly impacts the broader economy, particularly the tech sector. Due to the high cost of developing and maintaining AI models, the economy is seeing a substantial investment in this area, making the AI arms race a major consumer of financial resources.
