OpenAI asks investors to avoid five AI startups including Sutskever's SSI, sources say


FILE PHOTO: OpenAI logo is seen in this illustration taken May 20, 2024. REUTERS/Dado Ruvic/Illustration/File Photo

(Reuters) -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.

(Reporting by Krystal Hu, Anna Tong and Kenrick Cai in New York; Editing by Lisa Shumaker)

Follow us on our official WhatsApp channel for breaking news alerts and key updates!

   

Next In Tech News

Apple is trying to sell loyal iPhone users on AI tools. Here's what Apple Intelligence can do
Looking for new activities? Google wants you to turn to its navigation app
Will LinkedIn's AI HR assistant select the right candidates?
Staring at gadgets while in bed? You may get cross-eyed, warn experts
Voting rights groups worry AI models are generating inaccurate and misleading responses in Spanish
Nvidia to take Intel's spot on Dow Jones Industrial Average
U.S. regulators raise questions about siting data centers at power plants
Exclusive-Walt Disney forms business unit to coordinate use of AI, augmented reality
Crypto ETFs see big inflows ahead of U.S. election, traders brace for volatility
Apple to invest up to $1.5 billion in Globalstar for satellite coverage expansion

Others Also Read