(News Bulletin 247) – The start-up known for having launched ChatGPT a year ago, and of which Microsoft owns 49%, would be worth several tens of billions of dollars based on its fundraising. But planned transactions could bring this amount between 80 billion and 90 billion dollars.

One year ago today, on November 30, 2022, the young American company OpenAI launched what would become a true technological revolution: the ChatGPT conversational robot, the standard-bearer of the company’s know-how in artificial intelligence. (AI) generative.

The quality and speed of ChatGPT’s responses have caused real enthusiasm among users. And financial markets, which have begun to see significant monetization potential in generative AI. This notably boosted Nvidia’s price, because the rise of this form of artificial intelligence has propelled demand for its graphics cards.

“Although about two-thirds of people in the United States and Europe have heard of ChatGPT and other AI assistants, only a fifth of them have tried ChatGPT and businesses’ use of generative AI remains limited and mainly experimental”, however qualifies Deutsche Bank on the basis of a questionnaire.

Microsoft had a certain flair by investing massively in OpenAI with billions of dollars. The Seattle group would thus own 49% of the capital of the young company, according to several American media. This has allowed it to integrate ChatGPT technologies into several of its flagship products and divisions, such as the Bing search engine and its Azure cloud computing unit.

From $27 billion to $90 billion?

But how much is OpenAI and therefore Microsoft’s stake currently worth? The exact answer does not exist for the simple reason that unlike Microsoft, the start-up is not listed on the stock exchange and does not publish accounts and therefore a balance sheet allowing a valuation to be deduced. The Information site, however, reported at the end of August that OpenAI was “on track” to generate $1 billion in revenue over the next twelve months, and was already achieving monthly revenue of $80 million at that time. dollars.

Returning to OpenAI’s valuation, the Wall Street Journal reports that the company was valued “just under $30 billion” when it raised money in January from Microsoft and other investors. The Information, for its part, reports a figure of 27 billion dollars on that same date.

Except that almost eleven months have since passed and the potential of generative AI has, in the meantime, further convinced investors.

According to an article published at the end of September, again by the Wall Street Journal, OpenAI would have discussed with investors in Silicon Valley with the aim of selling hundreds of millions of dollars of existing shares. According to the business daily, this round of financing would have granted a company valuation to the young shoot of between 80 billion and 90 billion dollars.

In mid-October, Bloomberg reported similar information, explaining that the company planned to sell shares currently held by employees to investors, which would imply an underlying valuation of $86 billion. More recently, last week, The Information reported that the return of Sam Altman to the leadership of OpenAI had put this potential transaction valuing the company at $86 billion back in the saddle.

Microsoft still higher

Very interesting point nevertheless: the recent governance tumults within OpenAI, with the ouster and then the recall in a few days of Sam Altman, have potentially had a theoretical impact on this valuation.

Bloomberg, in an editorial, explains it very well. The question is not so much how much OpenAI is worth, but rather understanding what explains the value of a company. We can think that it is the technologies and therefore the group’s potential sources of income that justify this value. But these technologies are worthless without the engineers and leaders who created them.

During the governance crisis that OpenAI experienced, the vast majority of the group’s employees threatened to leave the company if Sam Altman was not reinstated as general manager. If they had followed through on their threat, Microsoft probably would have hired them.

Clearly, the Seattle group would then have “bought” OpenAI at a lower cost. At this precise moment, the valuation of the start-up could clearly collapse. “At one point OpenAI’s valuation was apparently zero dollars: several OpenAI investors were loudly declaring that they were going to write their shares down to zero, and it looked like Microsoft was about to acquire most of the staff of OpenAI without paying anything to the company (or its other investors) in exchange,” explains Bloomberg.

So this did not happen since Sam Altman returned and the OpenAI board of directors was renewed and more aligned with the leader’s strategy. This governance overhaul, with a more “pro-business” board of directors, can also justify that the group’s valuation could exceed $86 billion. This is one of the multiple possible interpretations of the outcome of this saga but not the only one.

In any case, it seems that Microsoft could ultimately benefit from a significant theoretical capital gain on its shares in OpenAI. Its 49% stake was worth around $14 billion in January, when the group significantly increased its investments in the start-up, based on indications given by the American media. A valuation of between $80 billion and $90 billion would bring this figure to between $39 billion and $44 billion.

This, however, remains relatively modest (less than 2%) in terms of Microsoft’s market capitalization. The group currently weighs more than 2,800 billion dollars and continues to push back its all-time highs on the stock market thanks to the dynamism of its cloud activities. Bank of America’s price target ($415) gives such potential that the Seattle group would exceed $3,000 billion in capitalization… Which could then, all things being equal, threaten the status of the world’s largest capitalization. Apple (2950 billion).