OpenAI is talking to investors about a share sale that would value the artificial-intelligence startup behind ChatGPT at between $80–$90 billion, roughly triple its level earlier this year.

The startup, which is 49% owned by Microsoft, has told investors that it expects to reach $1 billion in revenue this year and generate many billions more in 2024, people familiar with the discussion said.

The deal is expected to allow employees to sell their existing shares as opposed to the company issuing new ones to raise additional capital. OpenAI representatives have begun pitching investors on the deal, the people said, though it is possible the terms could change…OpenAI is aiming to sell a few hundred million dollars worth of existing shares to Silicon Valley investors. In the past, venture firms such as Sequoia Capital and Khosla Ventures have purchased OpenAI shares through tender offers, though the bulk of its external funding is from Microsoft.

The transaction would immediately give Microsoft a huge paper profit. The tech giant invested billions of dollars in the startup in January 2023 to help finance the intensive computing costs necessary to train its advanced AI models. At the time, OpenAI was valued at a bit under $30 billion.

The company, run by Chief Executive Sam Altman, only began generating substantial revenue after the release of ChatGPT in November, and its fast growth speaks to the speed at which some companies are embracing generative AI products.

This employee share sale could set a minimum price for any such additional fundraising from outside investors. OpenAI is widely expected to raise more money by issuing new shares as it seeks to keep up with computing costs required to develop and maintain its AI systems. Altman is already fielding intense interest from investment giants like Masayoshi Son’s SoftBank, people familiar with the matter say. A capital raise would involve selling new shares and be separate from the tender offer process under way now.

…Altman has said he doesn’t plan for OpenAI to go public or sell itself to a buyer, meaning that these routine sales of existing shares are an important way for employees to cash out on stock. OpenAI is intent on Microsoft holding a minority stake in the company, people familiar with the matter said, meaning that the tech giant likely wouldn’t be able to buy shares offered in any financing that would push its stake above 50%.

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