Some OpenAI Investors Sit Out Share Sale, Reflecting AI Divide
After a yearlong frenzy to invest in AI startups, some VC firms are largely avoiding the buzzy sector, chilled by the high valuations of OpenAI and worried about the threat of Google and Amazon.
For the past year, owning a stake in OpenAI was akin to possessing Silicon Valley gold, signaling that the investor had a ticket to the next great tech transformation. But as the valuation of the startup has tripled, some investors have refrained from buying more. And a number of marquee venture capital firms have shied from investing in dozens of artificial intelligence startups out of fears that the sector is too competitive and prices are too high.
Founders Fund has been in the more cautious camp. In January 2023, it agreed to buy shares in the ChatGPT maker from existing holders at a price that implied a $29 billion valuation. But when OpenAI late last year embarked on a new sale of employee and investor shares at an $86 billion valuation, Founders Fund didn’t purchase more. It’s largely been avoiding the generative AI sector.