OpenAI asks investors to avoid five AI startups including Sutskever's SSI: Report

As global investors such as Thrive Capital and Tiger Global invest $6.6 billion in OpenAI, the ChatGPT-maker sought a commitment beyond just capital — they also wanted investors to refrain from funding five companies they perceive as close competitors, sources told Reuters. The list of companies includes rivals developing large language models such as Anthropic and Elon Musk's xAI. OpenAI's co-founder Ilya Sutskever's new company, Safe Superintelligence (SSI), is also on the list. These companies are racing against OpenAI to build large language models, which requires billions in funding.

Two AI applications firms, including AI search startup Perplexity and enterprise search firm Glean, were also named in OpenAI's conversation with investors, suggesting OpenAI plans to sell more of its tools to enterprises and end users as it makes ambitious revenue growth projection to $11.6 billion in 2025 from $3.7 billion this year.

OpenAI, Perplexity and SSI declined to comment. Anthropic and Glean did not immediately respond. XAI could not be reached for a comment.

The request, while not legally binding, demonstrates how OpenAI is leveraging its appeal to secure exclusive commitments from its financial backers in a competitive field where access to capital is crucial.

While such expectations are not uncommon in the venture capital world, it's unusual to make a list like OpenAI has. Most venture investors generally refrain from investing in direct competitors of their portfolio companies to avoid reputational risks.

However, this line has been blurred for late-stage investors who tend to spread their bets, such as SoftBank and Fidelity, which has invested in both xAI and OpenAI. While OpenAI's request does not apply to its past investors and the investments they have already made, it could have implications for OpenAI investors and the five competitors in their future fundraising efforts.

The Financial Times and Wall Street Journal first reported some of the companies on the list.

Published - October 03, 2024 09:49 am IST

Disclaimer: The copyright of this article belongs to the original author. Reposting this article is solely for the purpose of information dissemination and does not constitute any investment advice. If there is any infringement, please contact us immediately. We will make corrections or deletions as necessary. Thank you.
You might also like