Exclusive: OpenAI, Valued at Nearly $20 Billion, in Advanced Talks with Microsoft For More Funding

OpenAI, whose text- and image-generating artificial intelligence has become a mainstream hit, is in advanced talks to raise more funding from Microsoft, which previously backed the startup with capital that includes credits to use Microsoft’s Azure cloud computing services to develop its technology, according to a person with knowledge of the discussions. A new deal could help Microsoft grow Azure usage, one of its top priorities, while keeping OpenAI’s business away from rivals including Amazon Web Services and Google Cloud. The talks follow a previously undisclosed sale of OpenAI stock by existing shareholders last year to investors including Sequoia Capital, Tiger Global Management, Bedrock Capital and Andreessen Horowitz. In that deal, the price of the shares implied a valuation of nearly $20 billion for the seven-year-old startup, said several people with knowledge of the deal.

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October 20, 2022 5:20pm EDT

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EXCLUSIVE

OpenAI, Valued at Nearly $20 Billion, in Advanced Talks with Microsoft For More Funding

By Aaron Holmes, Kate Clark, Erin Woo and Amir Efrati

OpenAI, whose text- and image-generating artificial intelligence has become a mainstream hit, is in advanced talks to raise more funding from Microsoft, which previously backed the startup with capital that includes credits to use Microsoft’s Azure cloud computing services to develop its technology, according to a person with knowledge of the discussions. A new deal could help Microsoft grow Azure usage, one of its top priorities, while keeping OpenAI’s business away from rivals including Amazon Web Services and Google Cloud.

The talks follow a previously undisclosed sale of OpenAI stock by existing shareholders last year to investors including Sequoia Capital, Tiger Global Management, Bedrock Capital and Andreessen Horowitz. In that deal, the price of the shares implied a valuation of nearly $20 billion for the seven-year-old startup, said several people with knowledge of the deal.

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