OpenAI raises $300M, Now More Valuable than eBay, Roblox, & Snap

It looks like Microsoft isn't the only company popping champagne at their offices. OpenAI, the creator of ChatGPT, is also rolling in dough.

A new report from TechCrunch indicates OpenAI has raised $300 million in venture funding, including from billionaire (and longtime Elon Musk friend) Peter Thiel's Founders Fund and Sequoia Capital, which famously backed Sam Bankman-Fried's FTX, a decision they came to regret later. Other VC investors include Andreessen Horowitz, Thrive, and K2 Global.

According to the report, the latest round of funding values OpenAI at between $27 billion and $29 billion, which would mean it's now more valuable than eBay (~$24.6B), Roblox (~$22B), Snap Inc. (~$14B), and even Dropbox Inc. (~$7.1B).

VC funds usually like betting on promising ventures, and OpenAI is a no brainer. At its current valuation, it's only a matter of time before it joins the likes of tech titans. We're talking Amazon, Meta, Google, big.

OpenAI is famously backed by Microsoft, which entered a $10 billion strategic partnership with the company soon after the launch of ChatGPT. But it wasn't the first time Microsoft invested in OpenAI; their association actually began in 2019, when Microsoft made an initial investment in the budding startup.

A little known fact about OpenAI is that one of its founders is Twitter/SpaceX/Tesla-CEO Elon Musk who not only recently urged the company to immediately pause the training of AI systems more powerful than GPT-4, but also announced plans to launch his own generative AI called TruthGPT.

At this point in time, there's nothing that indicates that TruthGPT will surpass the success of ChatGPT, but hey, that's not going to stop Musk. That said, it's hard not to feel bad for Musk who left OpenAI in 2018 due to… let's say, creative differences with the OpenAI management. In the years since, OpenAI has transformed into a force to be reckoned with, and had Musk still been with the company, he likely would have been billions richer than he already is at the moment.

Meta still full-steam ahead on the Metaverse (Kinda!) 🚂

Ah, the metaverse. They say Zuckerberg's fate with the metaverse is written in the web3, let's just hope it's not a verse about getting Zucked!

While Microsoft, Amazon, and Google are duking it out in the AI space, Zuckerberg has had his eyes on the metaverse for years. That bet has largely not paid off, with Zuckerberg losing more and more of his net worth by the day.

But the biggest losers of Zuckerberg's ambition have been Meta employees, thousands of whom have been laid off back to back as the middle-aged CEO balances investor demands with his ambitions. For now, investors are taking a sigh of relief after the company posted better than expected financial results.

Meta, the parent of Facebook, Instagram, and WhatsApp, reported a first-quarter revenue of $28.10 billion, beating expectations of $27.66 billion and up 3% year-over-year. Despite the revenue beat, Meta’s net income company-wide was down 24% year-over-year, from $7.47 billion to $5.71 billion.

Still, investors believe the company is headed in the right direction, especially considering that Zuckerberg is changing his tune on the metaverse to focus more on AI (who would've thought 🙄). Still, Zuckerberg hasn't given up on the metaverse yet.

"A narrative has developed that we’re somehow moving away from focusing on the metaverse vision, so I just want to say up front that that’s not accurate," Zuckerberg was quoted as saying following the release of the company's earnings release. "We’ve been focusing on AI and the metaverse, and we will continue to."

But it's not all rosy for Zuckerberg; the company's biggest stakeholder — its employees — questioned his leadership during an hour-long town hall meeting recently. According toThe Washington Post (which is owned by Amazon's Jeff Bezos btw.), employees asked the CEO why they should have confidence in his leadership, especially considering the thousands Meta has had to lay off because Zuckerberg flew too close to the sun.

Now, morale is low, particularly given that Meta is expected to let go of another 4,000 employees in the near future as part of the 10,000 cuts it announced in March. Whether Meta can navigate these turbulent times, only time will tell. For now, its earnings have bought it a lifeline.

Meta ranked #25 on HackerNoon's Tech Company Rankings this week. Facebook was in the #1 spot, while Instagram was trending on #35.

In Other News.. 📰

• Microsoft is still vying for Activision-Blizzard despite facing a setback in the UK.
• Geoffrey Hinton, the 'Godfather of AI', recently quit Google to speak about the dangers of artificial intelligence.
• Mastercard will expand its cryptocurrency payment card programme by seeking more partnerships with crypto firms, Reuters reported.
• The European Union is likely to reach a political agreement this year that will pave the way for the world's first major artificial intelligence law.

And that's a wrap! Don't forget to share this newsletter with your family and friends! See y'all next week. PEACE! ☮️

— Sheharyar Khan, Editor, Business Tech @ HackerNoon