Openai, a San Francisco artificial intelligence lab, released a chatbot five weeks ago. More than one million people have used the tool to create everything from poetry to high school term papers.
Openai is in the middle of a gold rush.
Two people with knowledge of the discussions said that the lab is in talks to complete a deal that would value it at $29 billion. Depending on the number of employees who agree to sell their stock, the potential deal could be worth as much as $300 million. Two people said the company is in talks with Microsoft for more funds.
Silicon Valley's deal-making machine is still going strong despite the tech downturn. Tech investors are optimistic after a rough year that included mass layoffs and cuts.
generative artificial intelligence, the term for technology that can generate text, images, sounds and other media, has created a lot of excitement. The new wave of artificial intelligence, the result of more than a decade of research, is a more powerful and mature type of A.I.
This type of A.I. promises to change everything from online search engines to photo editors. It would allow people to chat with computers and other devices as if they were chatting with someone else.
Deals have been made around generative A.I. companies. Jasper raised $125 million in October and is valued at over $1 billion. A company founded in 2020 raised $101 million in one month and is worth $1 billion. Character.ai, Replika and You.com are some of the smaller A.I. companies that have received interest from investors.
According to data from PitchBook, investors invested almost the same amount into generative A.I. companies as they did in the previous five years.
The Wall Street Journal reported on Openai's valuation. Two people said that the firms might buy shares in the tender offer. OpenAI began as a not-for-profit company and it's hard to pin down its exact valuation.
The proposed investment was not commented on by the three companies.
Tech giants and ambitious start-ups have developed generative A.I. in the past. The technology did not capture the public's attention until last spring, when Openai unveiled a system called DALL-E that let people generate photo- realistic images simply by describing what they wanted to see.
Entrepreneurs and investors made sweeping statements of disruption as a result of that. Fans used the technology to generate love letters and business plans after the release of Openai's new product.
Bonatsos is an investor at the venture capital firm General Catalyst. It might be bigger, too.
generative A.I. has the potential to generate trillions of dollars of economic value, according to investors. There is an element to this that feels like the beginning of the internet.
Tech giants have been hesitant to release generative technologies to the public because they often produce toxic content, including misinformation, hate speech and images that are biased against women and people of color. Smaller companies like Openai are less concerned with protecting their corporate brand and are more willing to let the public know about their technology.
Academic research papers and open source software contain the techniques needed to build generative A.I. They have access to deep pockets and raw computing power which makes them an advantage.
Many top researchers from leading A.I. labs have left recently to found new start-ups. Some of the largest funding rounds have gone to these start-ups, with the excitement surrounding DALL-E prompting venture capital firms to invest in more young companies.
More than 450 start-ups are working on generative A.I. The investor's eagerness to find the next big thing has compounded the frenzy.
The tech downturn last year resulted in a lull in investor activity, according to an investor at a venture firm.
He said that people got excited about A.I. There is a next thing to be excited about and people need to know that.
There is concern that the hype around generative A.I. has gotten out of hand. The technology has raised ethical questions about how generative A.I. may affect copyrighted works. Some people think that big tech companies such as Google will be in a better position to beat the young upstarts.
There are a lot of teams that don't have any A.I. competencies.
After the arrival of Stability Artificial Intelligence in October, the swell of excitement continued.
The start-up helped fund an open source software project that quickly built image generating technology. Stable Diffusion was an open source version of DALL-E that anyone could use. People used the tool to create realistic images of everything from a medieval knight crying in the rain to Disneyland.
The founder and chief executive of chat bot start-up Replika said in an interview that she was contacted by more than 30 firms. She decided against additional funding because her company is making money.
She said that she felt like the person who was a week early arriving at the airport for a flight.
You.com, which is adding chat technology to its internet search engine, has been flooded with interest from venture capitalists.
A sign that he should shift from his existing start-up is that his tool quickly hit one million users. He was able to raise $5 million for the project within a few weeks.
Mr. Shameem compared the moment around generative A.I. to the present day. He said it felt like a rare opportunity.
Most of the companies in Insight's portfolio have been encouraged to incorporate generative A.I. technology into their offerings. He said it was difficult to think of a company that wouldn't use it.
One of the global centers of A.I. research has created a venture firm that invests in this kind of technology. More than half of its investments are in generative A.I. companies. Those bets look better now.
People thought Radical was crazy for four and a half years. They thought we were geniuses for the last six months.
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