Shark Tank star Kevin O’Leary says he’s trying to decide whether or not to invest in ChatGPT’s next funding round.
“I’m very lucky to be offered to take equity out, but it’s a $29 billion valuation with virtually no revenue…I’m looking at that,” O’Leary said on Yahoo Finance Live (video above).
OpenAI was last valued at $29 billion in a funding round in early January, led by a $10 billion slug secured from Microsoft. The tech giant is integrating OpenAI’s ChatGPT AI into its Bing search engine.
“We will likely add a 1% weighting to ChatGPT in the portfolio which should hold this, although I am silent on the valuation. I am choking,” O’Leary added.
Two elements of ChatGPT caught the eye of O’Leary, a savvy businessman and investor from Canada. The first is the raw ChatGPT technology downloads which hints at significant market share gains against AI rivals in the future.
ChatGPT hit the 100 million user milestone in January, according to recent data from Demand Sage.
“Now tell me (downloads) aren’t killing Google, and they are,” O’Leary said.
Another key selling point for O’Leary is the financially lucrative recurring revenue associated with ChatGPT. According to O’Leary, some of his employees subscribe to the $20-per-month premium ChatGPT feature.
The feature allows users to access the service when the free version is down, which happens frequently.
“They’re getting revenue all of a sudden because they’re so popular,” O’Leary said.
Ultimately, O’Leary believes OpenAI-owned ChatGPT could be a game-changer in the search engine market, where Google has reigned supreme. It was this type of hype that lit a flame under nearly every AI stock in February.
Shares of C3.ai soared 20% in February alone. Microsoft stock is up 5% this month. Alphabet – seen as behind Microsoft in the AI wars with Bard – saw its stock drop 5% in February.
“While at first it feels like Google rushed Bard into the market with the Microsoft ChatGPT deal and event eclipsing the company, this ride will be a long one and we expect Google as well as Apple, Meta and other tech stalwarts are spending billions on this AI arms race over the next few years,” Wedbush technical analyst Dan Ives said in a note.
Sarah A. Smith is a producer and booker at Yahoo Finance.
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