How to Buy OpenAI Stock
Looking to invest in artificial intelligence? Read on to learn how you can invest in OpenAI, the company behind ChatGPT.
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As ChatGPT continues to gain immense popularity and attracts substantial investments from major players, it's hard not to notice the buzz around OpenAI.
Perhaps you're wondering how you could ride the wave of OpenAI's success.
In this guide, dive into the different investment opportunities for OpenAI (plus, some risks you should consider).
What is OpenAI?
OpenAI is an artificial intelligence (AI) research lab and company. Its most famous creations include ChatGPT, DALL-E, and Codex.
Founded as a non-profit by Sam Altman and Elon Musk, along with 4 other partners in 2015, OpenAI aims to advance AI in a way that will benefit humanity as a whole.
In 2019, OpenAI transitioned to a hybrid of a for-profit and non-profit organization called capped-profit. This way, institutional investors can assist with financing their mission.
As an accredited investor, this also means that you might just be able to participate in the growth of OpenAI for capital gains.
Can you buy OpenAI Stock?
OpenAI is a private company, so you can't just buy its shares on your regular stock trading apps. But don't worry—you've got some other options:
- Direct investment
You can use secondary platforms like EquityZen or Hiive to buy OpenAI shares directly from existing shareholders. These secondary platforms will help you with all the paperwork involved, making the process smoother. - Indirect investment
If buying private stock directly isn't your thing, you can still invest indirectly. One way is by buying shares of OpenAI's major shareholders, like Microsoft, for risk exposure.
Continue reading to take a closer look at how these investment options work, starting with direct investing through EquityZen.
How to Buy OpenAI Stock Before IPO
Here's how you can buy OpenAI stock directly before it goes public:
Buying through EquityZen:
Want to invest in OpenAI before it IPOs? Get ahead of the curve with EquityZen - a platform that gives accredited investors access to private companies before they go public. Here's how to get started:
1. Sign up with EquityZen
2. Search for OpenAI
3. Invest via a fund that owns shares of OpenAI
Register now to unlock exclusive access to hundreds of high-growth startups, like Stripe, SpaceX, Reddit, and OpenAI.
If it's not available yet, users will be notified once it is.
Invest in Private Companies
- Invest in pre-IPO companies through an EquityZen fund.
- $10,000 minimum investment
- Available to accredited investors only
Buying through Hiive:
You can also buy OpenAI shares through Hiive, a private stock marketplace. One of their best features is the stock price chart so you can automatically see the current value of each OpenAI share.
To get started:
- Sign up on Hiive.
- Place an anonymous bid for OpenAI shares.
- Negotiate directly with the matched seller.
- Receive your shares after the company approves the deal.
Next, learn how to gain exposure to OpenAI with other methods.
How to Indirectly Invest in OpenAI
To invest indirectly in OpenAI, all you need to do is buy shares of companies or funds that invest in them. Here are a few examples:
- Microsoft (MSFT)
In 2019, Microsoft became OpenAI's strategic partner. Since then, they have invested billions in OpenAI.[1]To invest: Create an account on a stock trading app like Robinhood, add funds, and buy Microsoft (MSFT) shares.
- Fundrise Innovation Fund
According to Fundrise's Innovation Fund Annual Letter, OpenAI is one of the companies included in its portfolio.[2]To invest: Go to Fundrise's website or app, sign up, and invest at least $10 in the Fundrise Innovation Fund.[3]
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ETFs with Exposure to OpenAI
OpenAI remains private, so you won't find its stock in ETFs. But you can still invest in ETFs composed of companies with similar technology. Here are some options:
- Roundhill Generative AI and Technology ETF (NYSE: CHAT)
This ETF has a dynamic approach to choosing assets for inclusion. If you want to invest in a similar generative chat technology like that of ChatGPT, you can invest in this ETF. - Global X Robotics and Artificial Intelligence ETF (NASDAQ: BOTZ)
This ETF includes companies associated with the development of AI. - ROBO Global Robotics and Automation ETF (NYSE: ROBO)
This fund gives you access to cutting-edge tech companies, like those leading the way in AI-driven robotics and automation.
OpenAI has no stock symbol yet because it remains a private company. Once it goes public, the OpenAI stock symbol will also be released.
OpenAI and Microsoft Partnership
This year (2023) marks the third phase of Microsoft and OpenAI's partnership.[4] Microsoft has previously invested in 2019 and 2021, with a total of more than $3 billion.
While the company has released no official figures, industry analysts estimate that Microsoft's 2023 investment in OpenAI could amount to around $10 billion.
OpenAI and Microsoft have collaborated in various ways. For example, Microsoft has used OpenAI's GPT-4 to improve its Bing chatbot. It has also integrated the technology into popular tools like Word, Excel, and the Azure cloud computing platform.
Microsoft is developing and implementing specialized supercomputing systems to support OpenAI's research initiatives. In addition, Microsoft Azure will provide OpenAI with all the necessary cloud computing resources.
No, Microsoft does not own OpenAI. However, Microsoft has made multibillion-dollar investments in OpenAI since 2019. Microsoft has formed a strategic alliance with OpenAI to incorporate their AI advancements into its products and services.
Why invest in OpenAI?
Investing in OpenAI can be a promising opportunity for several reasons.
One of the notable developments is ChatGPT, an advanced language model developed by OpenAI. ChatGPT is designed to have interactive and engaging conversations with users. This makes it a valuable tool for various applications like customer support, virtual assistants, and more.
Some analysts say that ChatGPT sets the record for the fastest-growing user base. It reached 100 million monthly active users in January 2023, just two months after its launch. This highlights rapid adoption and popularity in the market.
ChatGPT's specific revenue or profit share is not publicly disclosed. Nevertheless, OpenAI's success with ChatGPT and its other AI technologies is expected to positively affect its financial performance.
Microsoft and other industry leaders have invested significantly in OpenAI. This demonstrates confidence in the company's potential for generating revenue and profitability.
No, ChatGPT is owned by OpenAI, which is not publicly traded on stock exchanges. It is not possible to purchase stock in ChatGPT or OpenAI directly.
What is OpenAI's valuation?
In February 2024, OpenAI reportedly reached a valuation of $86 billion, allowing its employees to sell their shares.[5]
Then in August 2024, Bloomberg reported that OpenAI is in early discussions to raise funding at over $100 billion valuation.[6]
However, determining OpenAI's exact valuation can be challenging since it is a private company and does not publicly disclose its financial reports.
Analysts can only make estimates based on the funding rounds and investments made by major investors in the company. These estimates provide insights into OpenAI's potential value but may not reflect its current valuation accurately.
Now, let's check other risks that you need to look into when investing in OpenAI.
Yes, OpenAI is profitable. The company reportedly had a $2 billion revenue in 2023. This puts OpenAI on par with big players like Google and Meta, who also hit the billion-dollar mark within their first decade.
Risks in Buying OpenAI Stock
Before investing in OpenAI, take time to understand the risks related to this privately held company.
- Volatility
In general, stocks are known to be highly volatile assets. OpenAI is no exception, so it won't be surprising to see its stock price fluctuate over time. - Competition
Numerous tech companies and AI startups are striving to gain market share. This heightened industry competition could potentially affect OpenAI's growth and profitability. - Regulatory Changes
The AI industry is constantly changing in terms of regulations and policies. Any changes in laws or government policies may affect the operations and financial performance of OpenAI. - Intellectual Property
The protection of intellectual property is crucial in the tech industry. If OpenAI faces challenges safeguarding its technology and innovations, it may lead to legal problems or loss of competitive advantage. - Data Privacy and Security
Robust data privacy and security measures are needed when handling data. OpenAI must follow these standards to avoid breaches that could damage its reputation and customer trust.
OpenAI is not yet publicly traded, so there is very little information on its real-time stock price. However, Hiive has a stock price chart that offers a general estimate of its current value on the secondary market.
What are the alternatives to OpenAI?
In the AI Industry, many companies are creating products similar to ChatGPT. Big names like Google, Facebook, and Amazon also have their own technologies. Let's check them out!
- Alphabet Inc. (NASDAQ: GOOGL)
Alphabet Inc., the parent company of Google, invests a significant amount of resources in the research and development of AI.Google's AI ventures comprise programs such as Google Brain and DeepMind, which strive to progress in AI technology and its practical applications.
- Meta Platforms, Inc. (NASDAQ: META)
Meta is the parent company of Facebook, Instagram and WhatsApp. Facebook places a significant emphasis on AI and has established its own AI research division known as Facebook AI Research (FAIR).The company utilizes AI in various aspects, including content moderation, ad targeting, and natural language processing.
- Amazon (NASDAQ: AMZN)
Amazon has made impressive progress in AI, with products such as Amazon Alexa and Amazon Web Services (AWS) AI services. This technology is used to improve customer experiences and streamline operations. - NVIDIA (NASDAQ: NVDA)
NVIDIA is a global microchip manufacturer that invests heavily in artificial intelligence. One of NVIDIA's most prominent investments is in Recursion, an AI startup. Their teamup with Recursion is geared towards supercharging drug discovery using the startup's AI and cloud expertise. It's a win-win for both tech and healthcare as it brings cutting-edge innovation to the table. - IBM (NYSE: IBM)
IBM is a big player in the tech world with a history of AI research and development. Their Watson AI program is pretty famous—it can handle questions and give responses that sound just like a person. As of August 2023, IBM's total market capitalization reached $128 billion, making it a major player in the AI stock scene.
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ChatGPT is owned by OpenAI. The CEO and co-founder of the company is Sam Altman. Altman has served on the executive board since 2015. ChatGPT was released in November 2022.[7]
Bottom Line
It's important to note that as of now, you do not have the option to buy OpenAI stock. However, there is a strategic way to gain exposure to OpenAI's potential. That is through investing in Microsoft.
Also, the AI industry is dynamic. OpenAI isn't the only player in the game. You've got heavyweights like Google, Facebook, and Amazon stepping into the ring too. These companies can be alternative investment options.
But before making any investment decisions, make sure to conduct thorough research or seek professional advice. This ensures that your investment choices align best with your investment goals.
References
- ^ OpenAI. Our structure, Retrieved 09/07/2024
- ^ Fundrise. Innovation Fund Annual Letter: And they said it couldn't be done…, Retrieved 09/07/2024
- ^ Fundrise. What is the minimum investment for the Innovation Fund?, Retrieved 09/07/2024
- ^ Microsoft. Microsoft and OpenAI extend partnership, Retrieved 09/23/2024
- ^ Bloomberg. OpenAI Deal Lets Employees Sell Shares at $86 Billion Valuation, Retrieved 09/07/2024
- ^ Bloomberg. OpenAI Nears Funding Round at More Than $100 Billion Valuation, Retrieved 09/07/2024
- ^ OpenAI. Introducing ChatGPT, Retrieved 09/23/2024
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