Sammie Ellard-King
I’m Sammie, a money expert and business owner passionate about helping you take control of your wallet. My mission with Up the Gains is to create a safe space to help improve your finances, cut your costs and make you feel good while doing it.
OpenAi has landed and it’s been tearing up the news. If you’ve yet to hear of ChatGPT then you’ve been living under a rock but I’m guessing that if you’re looking to buy OpenAI stock then you probably have.
Investors are scrambling to get a piece of artificial intelligence businesses as AI stocks have fueled much of the growth in the tech industry and S&P500 for the past year.
Of course, with so much hype, it’s natural that investors are wondering how to buy OpenAI stock with it being the leader in the B2C consumer markets.
Table of Contents
How to Buy OpenAI Stock?
We must get this out of the way quickly so we don’t waste your time – you can’t buy OpenAI stock, which also means you can’t buy ChatGPT stock too!
OpenAI stock is not publicly traded right now and remains a private company.
BUT you can gain exposure to the general AI trend and still invest in OpenAI through businesses that own stakes in it, essentially still wetting your beak without having to directly invest in OpenAI.
Businesses like Microsoft are key investors in the business having invested 11 billion dollars. They are fully integrated now with OpenAI utilising their technology through the Bing search engine and Azure which OpenAI uses for its cloud computing services.
With Microsoft having just touched the surface with AI integration it’s the perfect business to buy if you’re looking at the AI industry and OpenAI specifically.
There are also AI technology funds on investing apps like eToro which have direct interests in the industry including power players and major competitors in the likes of Nvidia, Google, Amazon and Microsoft.
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What is Open AI?
OpenAI is a pioneering artificial intelligence (AI) research lab established in 2015 by a consortium of innovators, including Elon Musk, Peter Thiel, and Sam Altman, who is now the CEO.
The vision was to create a non-profit entity aimed at propelling the field of AI forward and making the fruits of its research freely available to the public.
Receiving initial funding from its founders, alongside major names in tech like Reid Hoffman, Jessica Livingston, and corporations such as Amazon Web Services and Infosys, OpenAI kicked off with an impressive $1 billion backing.
However, the monumental cost of AI research soon posed a challenge to this altruistic vision. Attracting additional financial support for a non-profit in this high-stakes, profit-driven field proved difficult.
This led to a strategic shift in 2019. OpenAI transitioned to a capped-for-profit model, establishing a for-profit subsidiary, OpenAI LP, under the continued governance of the non-profit OpenAI Inc.
This change enabled them to compete effectively for talent and to accept necessary venture capital, while still ensuring that excess profits flowed back to the non-profit parent.
Today, OpenAI is globally recognized for its leading-edge AI models. One of the star creations is the natural language processing tool, ChatGPT, and its latest version, GPT-4.
Launched in 2023, GPT-4 demonstrates impressive advances in human-like text generation and has even extended its capabilities to understand image inputs.
Its applications are diverse, powering Microsoft’s Bing chatbot and being integrated into numerous Microsoft platforms.
OpenAI has also developed DALL-E, a unique AI tool that can generate digital images from natural language prompts. Their Whisper AI system can also transcribe spoken language into text, further expanding their portfolio of AI solutions.
The relationship between OpenAI and Microsoft has grown over time, with Microsoft supporting OpenAI’s research with specialised supercomputing systems and meeting their extensive cloud computing requirements through Azure.
However, the ties with Microsoft have not been without controversy. Elon Musk, one of the original co-founders, has distanced himself from OpenAI, citing the company’s effective control by Microsoft.
Despite the challenges and complexities, OpenAI continues to advance in the AI space, driving research, and investing in startups that share their mission to push the boundaries of AI.
The light of OpenAI shines brightly in the AI landscape, striving to ensure that the benefits of artificial general intelligence are shared broadly and equitably.
Who has invested in ChatGPT?
| Date | Investor Name | Amount |
|---|---|---|
| August 2013 | Elon Musk, Greg Brockman, Reid Hoffman, Jessica Livingston, Peter Thiel, Amazon Web Services, Infosys, Sam Altman | Unverified |
| August 2016 | Y Combinator | $120k |
| March 2019 | Khosla Ventures | Unverified |
| July 2019 | Microsoft, Khosla Ventures | $1.0b |
| January 2021 | Tiger Global, Andreessen Horowitz, Bedrock | Unverified |
| January 2022 | Matthew Brown Companies | Unverified |
| January 2023 | Microsoft | $10b |
What is the market valuation of OpenAI?
In January 2023, Microsoft made a substantial investment in OpenAI, amounting to $10 billion, based on a valuation of the AI research lab at $29 billion.
Then, in a subsequent round of funding in April 2023, venture capital firms estimated OpenAI’s worth between $27 billion and $29 billion according to Tech Crunch.
It’s crucial to remember, though, that these numbers are not equivalent to a market valuation like those of public companies.
Private entities, such as OpenAI, do not have the financial transparency and real-time valuation updates that the stock market provides for publicly traded companies.
Therefore these figures should be viewed as an estimate of the organisation’s value at a specific point in time, influenced by factors such as the state of the AI technology market, the company’s potential for growth, and the investors’ strategic interests.
How to invest in AI technology?
There are some big players in the AI industry but with OpenAI being a private company you can look to invest in companies that partner with OpenAI.
We’ve mentioned Microsoft but there are other major players such as Salesforce, Atlassian, Bain & Company, Buzzfeed and Shutterstock. All who have announced OpenAI partnerships in 2023 in some capacity.
That’s not forgetting the major competitors with Google, Nvidia and Amazon (more on this below).
In terms of the wider AI industry, there are other big players you can gain exposure with such as Intel, AMD, Micron, Tesla, Accenture and even banks like Bank of America.
Equally, keep an eye on private companies that are experimenting with AI as they could blow up if they solve a big industry problem. This could turn them into a publicly traded company very quickly indeed!
All of the companies listed above are available on trading platforms like eToro and they also have dedicated AI sector funds which means you can diversify across a range of these top businesses.
30 million users worldwide enjoy social investing with over 3000 of stocks, funds, trusts and cryptocurrency available.
Use their social features and copy trading to follow and invest with the best investors on the app.
- 0% commission on real stocks and ETFs
- Social Investing
- Copy the top investors in the world
- Regulated by the Financial Conduct Authority (FCA)
- Lack of research
Index Funds
If you’re not comfortable buying individual stocks or direct AI technology funds then you can look at buying index funds.
This will give you a portion of the entire market meaning you’re diversified and aren’t having to check the stock price of individuals stocks every day.
Consider index funds that are tech-focused like the Nasdaq or wider nets like the S&P500.
Who are OpenAI's main competitors?
Alphabet (Ticker: GOOG)
OpenAI is occasionally referred to as a potential threat to Google’s dominance due to its ability to create high quality content.
Although it remains to be seen if OpenAI will realise this prediction, Alphabet Inc., the parent company of Google (Nasdaq: GOOG), is in the race with its alternative to ChatGPT, known as Bard.
Bard boasts features that align with search suggestions, images, and computing. Like Microsoft, Alphabet also generates revenue from ad services on Google and YouTube, while overseeing the Android smartphone operating system and numerous other projects.
Amazon (Ticker: AMZN)
Amazon, listed as AMZN on Nasdaq, wears many hats – it is the world’s biggest online retailer, offers tablet and streaming services, and even operates its own local delivery vans.
Beyond retail, Amazon’s Web Services (AWS) is a leading provider of cloud computing services. Given that many websites rely on AWS, countless individuals use Amazon’s services even without shopping on their website or frequenting Whole Foods.
In the realm of AI, Amazon has allied with Hugging Face, a privately-held company, to create a counterpart to OpenAI. This upcoming software will utilize AWS technology, aiming to cater to the informational needs of businesses and individuals once operational.
Additionally, Amazon, through AWS, collaborates with Stability AI to produce AI-generated images, offering a competitive alternative to OpenAI’s Dall-E.
Nvidia (Ticker: NVDA)
As a prominent player in the tech industry, Nvidia, listed on Nasdaq as NVDA, produces hardware and software for artificial intelligence applications.
They cater to a wide array of sectors, from OpenAI to bitcoin mining, autonomous vehicles, and video gaming. If a task demands a computer chip or a graphics processing unit (GPU), Nvidia is likely involved.
While OpenAI’s affiliation with Microsoft has resulted in decreased reliance on Nvidia, the company remains a trailblazer in the AI sector and continues to be a promising prospect in tech-focused investments.
Invest in Pre-IPO Shares
Whilst you can’t buy ChatGPT stock and because OpenAI isn’t a publicly listed company there isn’t a way to buy it. But there are ways to invest in seed rounds when businesses like OpenAI look to raise capital.
With Ai development being so rapid there are businesses out there that are raising capital. You’ll need to open a brokerage account that offers IPOs (initial public offering) and follow the steps to buy shares in these businesses.
In this case, I would always consult with an advisor to ensure you are making the right decision. Many investors like to get pre IPO shares but it isn’t without risk so be sure you do your due diligence.
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FAQs
Is OpenAI going to IPO?
The company has not stated whether it will IPO and will likely look to raise funds privately again before looking to raise cash in the open markets.
Is OpenAI Publicly Traded?
No, OpenAI stock is not publically traded and remains a private company until further notice.
Has Elon Musk invested in OpenAI?
Yes, Elon Musk was an original investor in OpenAI but after Microsoft took a major stake in 2019 Musk essentially backed out of the business stated he wasn’t happy with Microsofts majority control.
Should You Invest in OpenAI?
You cannot currently invest directly in OpenAI stock but you can invest in Microsoft who are the majority owner in OpenAI.
Does OpenAI have an app?
Yes, ChatGPT launched on IOS in May 2023 for US users. This is going to expand into other regions and likely an Android version in the near future.
What are the risks associated with investing in AI-related companies?
Investing in AI-focused companies does come with potential risks, which can include:
Technological Uncertainty: Rapidly evolving AI technologies can cause currently advanced solutions to become outdated swiftly.
Regulation and Compliance: As AI gets more prevalent, regulatory scrutiny could increase, potentially impacting operational costs and legal compliance.
Ethical Considerations: Privacy, bias, and ethical use of AI can affect a company’s reputation and customer relationships.
Talent Competition: Attracting and retaining skilled professionals for R&D in the AI field can be challenging due to high demand.
Monetization Challenges: Translating AI applications into profitable business models can be difficult.
Market Adoption: The market’s willingness to accept and use AI technologies can be influenced by cost, usability, and perceived value.
Intellectual Property Risks: Protecting intellectual property in AI is complex, leading to potential patent issues.
Cybersecurity Risks: AI systems can be prone to cyber attacks, leading to financial and reputational consequences.
Should I consult a financial advisor before investing in AI-related stocks or funds?
Yes, you should always consult a financial advisor if you’re not confident or require further advice before making any investment decision.
Conclusion
In conclusion, while OpenAI isn’t publicly traded, there are still ways to tap into the growth potential of the AI sector.
Investors can seek exposure to AI through established tech companies like Microsoft, which has a significant stake in OpenAI, or through AI-focused funds.
AI industry competitors like Google, Amazon, and Nvidia offer promising investment opportunities.
The fast-evolving nature of AI technology, regulatory scrutiny, ethical issues, and other challenges warrant careful consideration and due diligence before investing.
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Disclaimer: Content on this page is for informational purposes and does not constitute financial advice. Always do your own research before making a financially related decision.
