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OpenAI has asked investors to avoid backing rival start-ups such as Anthropic and Elon Musk’s xAI, as the ChatGPT maker seeks to shut out challengers and maintain its early lead in generative artificial intelligence.
The San Francisco-based group, led by chief executive Sam Altman, has made clear that it expects an exclusive funding arrangement, according to three people with knowledge of the discussions.
OpenAI is close to completing its latest $6.5bn funding round at a $150bn valuation.
Seeking exclusive relationships with investors would restrict rivals’ access to capital and strategic partnerships. The move risks inflaming existing tensions with rivals, especially Musk, who is suing OpenAI.
Venture firms are party to sensitive information about the companies they invest in, and close relationships with one company can make it difficult or contentious to also back a rival.
But exclusivity is rarely insisted on, according to VCs, and many leading firms have spread their bets in certain sectors. Sequoia Capital and Andreessen Horowitz, for instance, have both backed multiple AI start-ups, including both OpenAI and Musk’s xAI.
OpenAI can command unusual terms and an outsized valuation because investors believe the company could dominate the next wave of AI innovation, which they argue will be as significant a shift in consumer behaviour as the internet or mobile.
“If a company holds all the cards, they can force people to do things unnaturally,” said a partner at one leading VC firm, who noted that ride-hailing app Uber had a similar policy “when they were in full world domination mode”.
Thrive, a venture capital firm founded by Josh Kushner, is leading the round and has committed $1bn.
According to multiple investors with knowledge of the deal, other firms including early-OpenAI backer Khosla Ventures, SoftBank and the California Public Employees’ Retirement System (Calpers) are planning to invest either directly or via special purpose vehicles. Khosla’s vehicle could put in a total of $500mn or more, according to two of the people.
SPVs — entities through which venture funds can raise capital for a specific purpose — were also used as part of large funding rounds for AI start-ups Anthropic and xAI in recent months, according to people with knowledge of the deals.
OpenAI declined to comment. Khosla Ventures and Calpers declined to comment.
Strategic investors including Microsoft, Nvidia and Apple have also discussed participating in the round in recent weeks, according to people familiar with the discussions.
Investors have had to consider the company’s recent tumult, including a boardroom coup a year ago in which founder Sam Altman was briefly ousted. Last week, chief technology officer Mira Murati announced she would be leaving the company in a surprise move — the latest in a stream of senior departures this year.
OpenAI is also working on a corporate restructure that would move the start-up further from its origins as a non-profit, and allow investors to capture more of the upside should the start-up turn a profit.
Altman has held talks to hold equity in the company as part of the new fundraising, according to people familiar with the discussions, having previously said he did not want to take an ownership stake in the group.
However, he has dismissed reports that he will get an equity stake of 7 per cent in the new for-profit entity — which would be worth more than $10bn — as “ludicrous” in a staff town hall.
Musk, who co-founded and helped finance OpenAI in 2015 but stepped down three years later, filed a lawsuit in August that alleges the start-up abandoned its original not-for-profit mission to benefit humanity when it agreed a commercial partnership with Microsoft.
Musk accused Altman of “deceit of Shakespearean proportions” and the lawsuit seeks to void the Microsoft deal, which is also being probed by US and European antitrust regulators.
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