OpenAI, the company behind the ChatGPT chatbot and partially owned by Microsoft, is on the verge of a deal that would value the company at an astounding $90 billion. However, the completion of the deal may hinge on wealthy investors from the Middle East, according to sources familiar with the matter.
Sources say that OpenAI is currently in talks to facilitate a tender offer, allowing its employees to cash out of their private stock worth tens of millions of dollars. The tender offer is expected to close on October 21. Notably, there is significant demand for OpenAI shares from overseas investors, particularly from the Gulf region.
Despite this, the outlook for other high-priced tech deals remains uncertain. US investors are reportedly hesitant to invest in OpenAI due to its lofty valuation, and the recent terrorist attacks in Israel could further complicate fundraising efforts from sovereign wealth funds in the Persian Gulf.
According to an insider, the silence of Saudi Arabia about the conflict raises concerns about accepting investments from politically sensitive sources. In fact, there are already doubts surrounding the upcoming Future Investment Initiative in Riyadh, Saudi Arabia, hosted by the nation’s sovereign wealth fund. The event, taking place from October 24 to October 26, has experienced a decline in attendance in the past following the murder of Jamal Khashoggi in 2018.
Although it is too early to determine the long-term impact of the recent attacks, prominent leaders will have to decide whether to visit the region before the end of the month. The geopolitical situation has become increasingly complex, with countries and companies reacting to each other’s actions.
While some consider the optics of a fundraising trip to the Middle East, others believe that economic conditions in the US leave them with limited alternatives. With valuations plummeting and cheap capital difficult to access, some sources express frustration about the current state of fundraising.
However, there are those who maintain a more optimistic outlook. They believe that, similar to the aftermath of Khashoggi’s killing, deals may be dampened in the short term but business will eventually return to normal. Ultimately, the allure of money tends to overshadow transgressions.
The New York Post reached out to OpenAI for comment but did not receive a response.
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