Can I Invest In OpenAI?

It’s no exaggeration to say that generative A.I. has captured the public’s imagination.

Indeed, it’s sparked a gold rush among those hoping to exploit the new technology, with the term becoming a buzzword among industry leaders of late.

Like other types of artificial intelligence, generative A.I. learns from and utilizes past data to initiate future actions.

However, unlike previous iterations, it uses this training to create original content rather than simply categorizing or identifying information.

One of the most well-known examples of generative A.I. is ChatGPT, a chatbot created by Microsoft-backed OpenAI. This A.I. is a large language model, meaning it can generate human-like responses based simply on a text prompt.

With all the excitement surrounding OpenAI, investors might wonder how they can benefit from its meteoric rise.

So, let’s dive in and see what this trailblazing company has to offer.

What Is ChatGPT?

ChatGPT is an A.I. application developed by OpenAI, a research company headquartered in San Francisco.

The chatbot employs a machine learning technique called reinforcement learning from human feedback (RLHF), which allows it to generate human-like written communication. This is achieved by mimicking real-time instructions given by end-users and language models under the guidance of human trainers.

The initial version of ChatGPT was launched in November 2022 and was well-received by users. This prototype was based on a prior program – called InstructGPT – which was later superseded by a more stable second public version on February 13th, 2023.

Subscribers to the premium option, which costs $20 per month, are provided with priority access and faster response times, even during peak hours.

Is OpenAI a Publicly Traded Company?

At the present time, OpenAI is not yet a publicly-traded enterprise. This means it remains a private entity, with general investors having no automatic right to buy shares in the company’s business.

However, there could be a multitude of reasons why OpenAI does not trade publicly.

Firstly, the company might not desire the scrutiny and regulatory requirements of being listed on a stock exchange, which would curtail the firm’s freedom to exercise control over its operations.

Furthermore, OpenAI’s absence from a publicly-accessible trading platform could also be because the corporation does not actually need the capital that a public offering would bring.

For example, OpenAI has already garnered funding from private investors, including major organizations such as Microsoft and Infosys This has enabled the company to continue developing new technologies and expanding its footprint without relying on the cash an initial public offering would generate.

Does Elon Musk Still Own OpenAI?

Elon Musk once waged a court battle for the privilege of naming himself co-creator of Tesla, but is today distancing himself from one of his most renowned innovations.

Indeed, the businessman – now more famous for his association with Twitter and SpaceX – is also noteworthy for his involvement in setting up the firm responsible for ChatGPT.

However, after Microsoft’s multi-billion dollar investment in OpenAI, Musk has cut his ties with the corporation. The perennial CEO stated that it no longer resembled anything close to what he had established in December 2015, which, according to Musk, was a company created to be a not-for-profit open-source organization.

Can I Invest In OpenAI?

Despite the difficulties of investing directly in the company, one surefire way to gain exposure to OpenAI is to buy stock in Microsoft instead.

For instance, Microsoft’s investment of $1 billion in Open A.I. in 2019 has yielded significant benefits for the tech giant.

In fact, by partnering with OpenAI, Microsoft has gained access to cutting-edge technologies such as DALL-E and VALL-E. These will drive MSFT’s Image Creator and text-to-speech synthesis applications, which will play a crucial role in its new-fangled search engine.

In addition, Microsoft has integrated GPT technology into its product portfolio and, through its ownership of GitHub, has enabled the release of Copilot, an AI-powered coding assistant.

Ultimately, Microsoft’s partnership with OpenAI has positioned the company at the forefront of A.I. technology. This has enabled it to provide not just its customers with innovative and cutting-edge A.I.-enhanced products but also allowed investors to profit from the success of ChatGPT.

What Is OpenAI Worth?

As part of what will become a multiyear funding agreement, Microsoft has invested billions of dollars in OpenAI, enabling the software giant to become the tech start-up’s exclusive cloud provider.

If rumors are true that Microsoft could acquire a 49% stake in Open A.I. for $10 billion, this will put the firm’s valuation somewhere in the ballpark of $20 billion.

That said, sentiment in the company is highly optimistic, especially since the positive launch of ChatGPT.

Moreover, earlier predictions of OpenAI’s market capitalization were based on fairly low revenue predictions. But having amassed over 100 million users by January of this year – making it the fastest-growing consumer application ever – the sales potential for the company likely commands an upgrading to those previous estimates.

Likewise, according to anonymous sources cited by the Wall Street Journal, OpenAI could be worth up to $29 billion, with venture capital outfits Founders Fund and Thrive Capital ready to enter the fray.

Wrap-up: Can I Invest In OpenAI?

With OpenAI still a privately-held concern, those hoping to profit from its good fortune will have to wait a little while longer.

However, owning Microsoft shares is a great way to benefit from any upside the A.I. technology might bring to the blue-chip stock.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.