Primetime Partners’ co-founder Alan Patricof expressed skepticism regarding investing in OpenAI (the company behind ChatGPT), despite its rapid growth in the artificial intelligence industry.
Patricof, who appeared on CNBC’s Squawk Box called the $150 billion valuation of the company “staggering”, and noted that it had nearly doubled since 2024.
Patricof acknowledged the impressive capabilities of ChatGPT but said that OpenAI’s value is difficult to assess and makes it an unattractive option.
The American investor said, “It’s just not the game I’m looking for.” He cited the difficulty of determining the actual value of the company.
OpenAI continues to burn money
Bloomberg reported that OpenAI was looking to raise $6.5 billion for its latest funding round. Potential participants include tech giants Apple and Microsoft.
Tiger Global is expected to join in the round as well.
Patricof, among others, has expressed concern about OpenAI’s financial stability.
The information reports that the company is burning through cash at a rapid rate. Losses of $5 billion are expected this fiscal year.
These losses are in stark contrast with its projected revenue of just under $3 billion. This is a significant jump from the virtually zero revenue it had the previous year.
Patricof acknowledged OpenAI’s remarkable revenue growth. He said, “Its growth has been astronomical.”
OpenAI is a speculative tool
Patricof acknowledges OpenAI as the leader in the AI race but is not interested in investing. He describes the company as a “game for speculators.”
He said that while early leaders like OpenAI and Google are often dominant, the speculative nature in OpenAI’s valuation was too risky for him.
If OpenAI is successful in its funding round, it will be the second most valuable unicorn in the entire world.
Recent developments at OpenAI
OpenAI is expanding their offerings in addition to its ambitious fundraising efforts.
The company announced SearchGPT a new search engine for the internet that will compete with Google Search.
OpenAI is also working on a new large-language model, codenamed Strawberry. This model aims to solve the problems that GPT-4 and other models cannot.
“This new paradigm of AI models is better at tackling complex reasoning tasks,” OpenAI Chief Technology Officer Mira Murati said to Wired.
Investors like Patricof continue to debate OpenAI’s financial health and high valuation as it continues to innovate.
This post OpenAI’s 150 billion valuation is ‘for speculators, only’ says investor Alan Patricof could be modified as new information becomes available
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