Shark Tank star Kevin O’Leary said he is trying to decide whether to invest in ChatGPT’s next round of funding.
“I’m lucky enough to be offered to take some equity, but it’s a $29 billion valuation with virtually no revenue…I’m looking at it,” O’Leary said on Yahoo Finance Live (video up here).
OpenAI was last valued at $29 billion in a funding round in early January, spearheaded by a $10 billion slug secured by Microsoft. The tech giant is integrating OpenAI’s ChatGPT AI into its Bing search engine.
“We will probably add a 1% weight to ChatGPT in the portfolio that should hold that, although I’m keeping my nose at valuation. I was choking,” O’Leary added.
Two elements of ChatGPT have caught the attention of O’Leary, a savvy businessman and investor from Canada. First, there are the raw downloads of the ChatGPT technology, which indicate significant market share gains over AI rivals in the future.
According to recent data from Demand Sage, ChatGPT passed the 100 million user milestone in January.
‘Tell me it is [the downloads] Don’t kill Google, and it is,” O’Leary said.
Another major 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 a month premium ChatGPT feature.
This feature allows users to access the service when the free version is not available, which often happens.
“They’re suddenly getting revenue because they’re so popular,” O’Leary said.
Ultimately, O’Leary believes the ChatGPT, owned by OpenAI, could be a game changer in the search engine market, where Google reigned. It’s that kind of hype that sparked fire among almost all AI stocks in February.
Shares of C3.ai are up 20% in February alone. Microsoft’s stock is up 5% this month. Alphabet — seen as behind Microsoft in the AI wars with Bard — has seen its stock fall 5% in February.
“While it initially feels like Google has rushed Bard to market with the Microsoft ChatGPT deal and event overshadowing the company, this race will be a long one and we expect both Google and Apple, Meta and other techies to spend billions to this AI arms race in the years to come,” Wedbush technical analyst Dan Ives said in a note.
Sarah A Smith is a producer and booker at Yahoo Finance.
For more on the latest AI moves, check out Yahoo Finance tech editor Dan Howley’s new analysis.
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