OpenAI is reportedly raising funds at a $29 billion valuation—and its ChatGPT could challenge Google Search by getting wrapped into Microsoft Bing
OpenAI is reportedly on the verge of becoming one of the most valuable startups in the country—and Microsoft is counting on its ChatGPT chatbot to finally make Bing a worthy challenger to Google’s search dominance.
The Wall Street Journal reports the company is in talks to sell $300 million in shares in a tender offer to Thrive Capital and Founders Fund that would result in a valuation of about $29 billion. That would more than double the company’s value, despite skepticism from some parties about its ability to monetize ChatGPT.
As the fundraising effort moves forward, OpenAI has also struck a deal with Microsoft that will see ChatGPT incorporated into the Bing search engine to offer more conversational and contextual responses to inquiries, The Information reported, citing two people with direct knowledge of the plans.
The timeline for that addition is unclear, however, as the company examines the chatbot’s accuracy and how long it would take to incorporate it into Bing. It could reportedly launch before the end of March, though. (At present, Bing receives about 9% of search engine traffic, while Google dominates with an 83% share.)
Microsoft and OpenAI have a long relationship. Microsoft, based in Redmond, Wash., invested $1 billion in the startup in 2019.
Tesla CEO Elon Musk backed OpenAI after its 2015 launch and last month called ChatGPT “scary good,” warning, “We are not far from dangerously strong A.I.” He resigned from the startup’s board of directors in 2018, citing possible conflicts of interest because of Tesla’s own A.I. work.
ChatGPT, which enables users to get intelligent answers to everything from basic queries to hypothetical situations, requires a tremendous amount of computing power to train its algorithm, making investments and stock sales critical. While the chatbot has received praise for its speed and handling of complicated matters, OpenAI CEO Sam Altman warned in December that it has a long way to go and “it’s a mistake to be relying on it for anything important right now.”
Google isn’t standing still on the A.I. front, and its management declared a "code red" after ChatGPT’s release. The company has its own intelligent chatbot, called LaMDA (Language Model for Dialogue Applications). However, it has been slow to incorporate that into search results, as any mistakes the A.I. makes could damage the company’s search reputation.
This story was originally featured on Fortune.com
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