Summary
The United Arab Emirates (UAE) is negotiating a significant investment in OpenAI, the startup renowned for its development of ChatGPT, as part of a broader multibillion-dollar fundraising effort. The UAE’s state-owned investment entity, MGX, established earlier this year, aims to distribute capital to artificial intelligence (AI) ventures, though the precise amount under discussion for OpenAI has yet to be finalized, according to sources familiar with the negotiations. Should this investment materialize, it would signify an enhanced relationship between a key Middle Eastern nation and one of the foremost AI firms globally, which currently holds a prominent position among the most valuable private startups in the United States. OpenAI is pursuing funding that could reach as high as $6.5 billion, potentially elevating its valuation to $150 billion—a substantial increase from its previous valuation of $86 billion. This escalation reflects sustained investor enthusiasm surrounding generative AI and OpenAI’s pivotal role within the industry. Leading this funding round is Thrive Capital, which has pledged $1 billion. Other prominent companies such as Microsoft, Apple, and Nvidia are also reportedly engaged in discussions regarding investment, as previously detailed by The Wall Street Journal. Notably, OpenAI’s plans for a restructured corporate framework have emerged, as CEO Sam Altman aims to attract further investment by reconsidering the organization’s existing profit-sharing model. Currently, OpenAI functions as a nonprofit with a profit-capped subsidiary; however, Altman has indicated an intention to remove these profit limitations for investors while maintaining the nonprofit status, as affirmed by a company representative. Although OpenAI has yet to achieve profitability, its revenue trajectory is on a rapid upward trend, with annualized recurring revenues recently estimated at approximately $4 billion. This growth has drawn considerable interest from wealthy nations in the Middle East, eager to invest in the burgeoning AI sector. Furthermore, Sam Altman has been actively engaging with senior UAE officials, including Sheikh Tahnoun bin Zayed al Nahyan, regarding initiatives aimed at expanding global chip production capabilities—an endeavor that could require vast amounts of funding. Sheikh Tahnoun serves as the chairman of MGX’s board and supervises an extensive financial portfolio for the UAE. MGX was formed in March 2023 to fund AI startups and develop the requisite infrastructure to facilitate broader access to AI technologies. MGX counts Mubadala, the UAE’s sovereign wealth fund, and G42, a state-affiliated AI enterprise, among its founding partners. Notably, Mubadala has also made previous investments in AI competitors, including a substantial stake in Anthropic via the troubled FTX cryptocurrency exchange. The board of MGX has recently sanctioned various strategic initiatives centered on investments in digital infrastructure, advanced technology, and artificial intelligence, signaling the UAE’s commitment to becoming a key player in these sectors. For additional insights, please reach out to the correspondents Miles Kruppa at [email protected], Berber Jin at [email protected], and Tom Dotan at [email protected].
Original Source: www.livemint.com
Leave a Reply