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OpenAI value surges to $157bn in funding deal

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OpenAI value surges to $157bn in funding deal

OpenAI, the maker of ChatGPT, has raised $6.6bn in its latest funding round, as investors including its early backer Microsoft continue to bet big on artificial intelligence (AI).

The deal gave the tech company a value of $157bn (£118bn) – similar to investment bank Goldman Sachs and more than most of America’s biggest companies – making it one of the most valuable start-ups in the world.

OpenAI said the money would allow it to stay at the cutting edge of AI research.

The influx comes as the company has been in the spotlight, in part for internal leadership drama and debate over its future status.

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Chief executive Sam Altman is said to be restructuring the company to become a for-profit entity, stripping it of its non-profit board.

While the company’s transformation has helped attract investors, it has alienated some members of its staff and critics.

Those critics include OpenAI co-founder Elon Musk who departed the firm in 2018. He has said the company has abandoned its founding mission of developing AI for the benefit of humanity.

OpenAI is widely credited with helping bring artificial intelligence tools into the mainstream and sparking a gush of wider investment and interest in the sector.

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“The new funding will allow us to double down on our leadership in frontier AI research, increase compute capacity, and continue building tools that help people solve hard problems,” OpenAI said.

Funders in the latest round included investment firm Thrive Capital, Japanese tech conglomerate SoftBank, American chip giant Nvidia, and Microsoft, which already has a large stake in the company.

Under the terms of the deal, investors can renegotiate or claw back their funds if the structural change into a for-profit does not take effect within two years. It also hinges on and the removal of cap on returns for investors.

While the valuation announced Wednesday looked high by normal standards, “these are not normal times,” said Karl Freund, principal analyst at Cambrian AI Research.

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“Unless AI is somehow a bust, which I cannot imagine, OpenAI will be a powerful force to be reckoned with.”

OpenAI said it has 250 million weekly active users, as well as one million paying business customers.

The company is on track to generate $3.6bn in revenue. But projected losses of more than $5bn are set to outpace revenue, according to Reuters.

Pressure to quickly rollout new versions of its blockbuster chatbot has also strained relations between OpenAI’s research and safety teams and staff focused on monetising the company’s products, according to reports.

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OpenAI has seen an exodus of key executives in the year since Mr Altman was briefly ousted as its top executive in November, with departures including former chief scientist Ilya Sutskever.

Last week, the company’s long-time chief technology officer Mira Murati stepped down, saying in a statement that she had “made the difficult decision to leave” after much reflection.

Two top OpenAI researchers also announced their departures the same day as Murati.

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Travel

OPUL Jets partners with SpaceX’s Starlink Aviation

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OPUL Jets partners with SpaceX’s Starlink Aviation

Premier private jet charter provider OPUL Jets has announced a significant upgrade to its fleet through a new partnership with SpaceX’s Starlink Aviation. This strategic move will equip OPUL Jets’ compatible fleet with the latest in satellite internet technology

Continue reading OPUL Jets partners with SpaceX’s Starlink Aviation at Business Traveller.

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“Aircrafted by Emirates” launches limited-edition Neo collection

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“Aircrafted by Emirates” launches limited-edition Neo collection

This sustainable initiative follows Emirates’ successful “Aircrrafted by Emirates” up-cycled items collection. By repurposing materials, Emirates reduces waste and supports its partner, Team New Zealand, in their shared commitment to excellence and innovation.

Continue reading “Aircrafted by Emirates” launches limited-edition Neo collection at Business Traveller.

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Singapore’s former transport minister sentenced to one year in prison

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US stocks eked out slight gains, with Wall Street appearing in a generally cautious mood against the backdrop of rising tensions in the Middle East.

The S&P 500 closed less than 0.1 per cent higher on Wednesday, with the energy, technology and financial sectors emerging as the benchmark index’s best performers.

Investors bought energy stocks as the conflict in the Middle East continued to support the price of oil. Shares in industry leaders ExxonMobil and Chevron added 1.3 and 0.8 per cent, respectively.

Brent crude, the international benchmark, settled 0.5 per cent higher at $73.90 a barrel.

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The Nasdaq Composite added 0.1 per cent, with Apple and Nvidia the only members of the “Magnificent Seven” group of tech stocks to advance.

The yield on the policy-sensitive 2-year Treasury note added almost 0.02 percentage points to 3.63 per cent.

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White House deploys troops in vast hurricane recovery effort

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Joe Biden ordered 1,000 soldiers to go to devastated regions across the Southeastern United States as Washington scrambled to deal with the deadly aftermath of Hurricane Helene.

The White House said on Wednesday it would deploy the troops to assist with ongoing delivery of food, water and other aid to stricken communities.

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The storm, which developed in the north-west Caribbean Sea and the Gulf of Mexico, where scientists have recorded unusually warm sea temperatures, made landfall in Florida before sweeping through Georgia, South Carolina and North Carolina over the weekend, killing more than 100 people and causing torrential rain and mudslides across inland mountainous regions.

Biden was expected to fly over western North Carolina, much of which remains difficult to reach by road, before travelling to Georgia and Florida on Thursday, according to the White House schedule. Vice-president and Democratic presidential nominee Kamala Harris also headed to Georgia.

Kamala Harris comforts people as she visits an area impacted by Hurricane Helene in Augusta, Georgia
Vice-president Kamala Harris, in the middle of a presidential campaign against Republican former president Donald Trump, travelled to Georgia © AP

The troops will join 6,000 National Guard members and more than 4,800 federal workers spread across the multiple states affected by the hurricane, including 1,200 emergency workers in North Carolina. 

Secretary of Homeland Security, Alejandro Mayorkas, said earlier in the week that hundreds of homes and businesses had been destroyed and many areas were still in a search-and-rescue phase.

Rescue workers search for missing people in Burnsville, North Carolina
Search-and-rescue efforts continue across western North Carolina © Reuters

“We are there and we will continue to be there and we will reach the most difficult to access locations,” said Mayorkas.

The Department of Defense said on Wednesday that it had activated 22 helicopters and dozens of high-water vehicles to aid in the rescue efforts, while the Army Corps of Engineers was supporting with debris removal, wastewater management and bridge inspections.

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An all terrain vehicle approaches a section of destroyed road in the aftermath of Hurricane Helene, in Barnardsville, North Carolina
Flash flooding and landslides in western North Carolina have isolated many people © Reuters

More than 1.3mn people across the south-eastern US states of Georgia, South Carolina and North Carolina were still without power as of Wednesday afternoon, according to the tracking site PowerOutage.us. The White House said this compared with a peak of 4.6mn people without power last Friday at the height of the storm.

The Federal Emergency Management Agency (Fema) said that it had provided 50 Starlink satellite systems to bolster communications services after the internet and mobile network failed across the affected south-east regions.

Overturned car lies in mud near a flooded creek in Barnardsville, North Carolina
The storm inundated the western part of North Carolina with catastrophic flooding, © Reuters

Grassroots groups in western North Carolina were organising via social media to disperse food, water and petrol to rural communities which were isolated after mudslides and raging rivers destroyed roads across the region.

Helene is the eighth Atlantic hurricane of category four or five strength to make landfall in the US in the past eight years. The economic losses were estimated at up to $34bn by Moody’s this week, resulting from property damage and business disruption.

Scientists have found that warming sea temperatures are linked to more intense hurricanes. A preliminary study from the Lawrence Berkeley Lab in California found that climate change may have boosted the amount of rainfall over parts of Georgia and North Carolina by as much as 50 per cent.

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Where climate change meets business, markets and politics. Explore the FT’s coverage here.

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Housing shortage forcing dairy farmers off the land

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Banker all-nighters create productivity paradox

Madeleine Speed’s report “Worker shortages pose risk to food supply, warns Arla” (September 24) highlights how dairy farmers are quitting the industry. Herdspeople need to live near their work, but rural homes are invariably occupied by retirees or become holiday homes. Affordable rural homes can be built on so-called “rural exception sites”, but local authorities often require housing needs surveys to prove a need. These surveys cost a lot of money and only go to families who already have a home! Local authorities refuse to recognise numbers on their housing waiting list as proving need.

Only three parishes in the whole of East Devon have had such a survey in the past two years, so it is not a surprise that affordable rural homes are not being built. There are over 5,000 families in East Devon who are desperate for a home, but our council refuses to recognise them as being in need. The problem is the Nimbys.

Robert Persey
Honiton, Devon, UK

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Uber to launch limited-edition safari experiences in South Africa

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Uber to launch limited-edition safari experiences in South Africa

Uber is launching a limited-time safari experience in Cape Town, South Africa, available from 4 October, 2024, to 25 January, 2025, as the latest experience in their ‘Go Anywhere’ series of travel products

Continue reading Uber to launch limited-edition safari experiences in South Africa at Business Traveller.

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