For investors eager to delve into Open AI stock, it’s essential to note that the company, as of now, remains privately owned and is not available on any major stock exchange. Despite this limitation, there are alternative avenues for gaining exposure to the thriving artificial intelligence industry. Explore the possibilities of investing in associated stocks and ETFs that offer a connection to the innovative developments spearheaded by OpenAI. In this guide, we’ll outline strategies on how to navigate the current investment landscape surrounding OpenAI, shedding light on the transformative impact it is making in the field of artificial intelligence.
OpenAI, spearheaded by tech entrepreneur Sam Altman and headquartered in California, stands as a pioneering artificial intelligence research organization. Renowned for creating the generative pre-trained transformer (GPT) AI models, OpenAI has left an indelible mark on the AI landscape, powering popular products like ChatGPT and DALL-E.
How to Buy Open AI Stock
The simple answer to how to buy OpenAI stock is that you can’t right now. And there’s no timeline for when you might be able to do so. However, the next best thing is to buy the stocks of other publicly traded companies investing in OpenAI or benefitting from its growth. Here are three stocks you can buy to indirectly invest in the ChatGPT developer’s growth.
1. Microsoft
Investing in OpenAI can be strategically achieved by acquiring shares of Microsoft (MSFT -0.15%). Microsoft initially invested $1 billion in OpenAI in 2019 and collaborated to develop AI supercomputing technologies for its Azure cloud platform. As part of the agreement, OpenAI migrated its services to Azure, with Microsoft becoming the preferred partner for marketing new AI technologies.
In 2021, Microsoft increased its investment in OpenAI, seizing the opportunity presented by the launch of the AI chatbot ChatGPT in late 2022. By January 2023, Microsoft extended its partnership into a third phase, making Microsoft Azure the exclusive cloud provider for OpenAI.
While the exact amount of Microsoft’s additional investment in OpenAI’s third funding round remains undisclosed, reports suggest an infusion of $10 billion. The deal stipulates that Microsoft will receive 75% of OpenAI’s profits until it recovers its full investment, after which it will retain a 49% stake in the AI developer.
Throughout 2023, Microsoft integrated OpenAI’s technology into its applications. GPT-4, OpenAI’s latest large language model, powers Microsoft’s Bing search engine, although initial responses garnered attention for their occasional peculiarity. Microsoft also introduced OpenAI tech into Microsoft 365, unveiling the feature Microsoft 365 Copilot. This tool assists users in generating initial drafts of documents in Word, creating presentations in PowerPoint, analyzing trends in Excel, and offering suggestions in Outlook and Microsoft Teams.
Beyond its association with OpenAI, Microsoft stands out as a leading player in various tech domains, including cloud services, gaming, and quantum computing. Considering these factors, Microsoft stock presents a compelling investment opportunity.
2. Infosys
Infosys, a prominent India-based IT consulting company, stands as one of the early supporters of OpenAI. In 2015, then-CEO Vishal Sikka disclosed in a blog post that Infosys played a role in funding the AI developer when it operated as a nonprofit. Sikka foresaw the potential benefits for Infosys from OpenAI’s technology, a prediction that has since proven accurate.
At the June 2023 annual meeting, Infosys co-founder and chairman Nandan Nilekani revealed the company’s commitment to an “AI-first strategy.” Although not explicitly mentioning OpenAI or Infosys’ investment in the pioneer, Nilekani acknowledged recent strides in generative AI, a field exemplified by ChatGPT’s mainstream success.
In May 2023, Infosys unveiled its Topaz platform, described as “an AI-first set of services, solutions, and platforms utilizing generative AI technologies.” This innovative product facilitates rapid data analysis for clients. CEO Salil Parekh, during the same June meeting, highlighted that Infosys is actively engaged in 50 client projects utilizing generative AI. The company’s strategic embrace of generative AI underscores its commitment to staying at the forefront of technological advancements.
3. Nvidia
While Nvidia (NVDA -2.85%) doesn’t hold a direct investment stake in OpenAI, the semiconductor giant significantly benefits from the widespread adoption of artificial intelligence (AI).
In 2023, Nvidia witnessed an unprecedented surge in demand for its chips, driven by the fervor surrounding the AI megatrend. The fiscal third quarter of 2024 marked a remarkable milestone, with Nvidia’s revenue soaring by an impressive 206% to reach a record-breaking $18.1 billion. The stellar performance was particularly fueled by the exceptional growth in data center revenue, which surged by 279% year over year, reaching $14.5 billion. This surge in revenue contributed to a remarkable twelvefold increase in earnings.
Jensen Huang, the CEO and founder, attributed the robust growth to the industry’s transition from general-purpose to accelerated computing and generative AI. In a press release accompanying the third-quarter earnings report, Huang expressed, “Our strong growth reflects the broad industry platform transition from general-purpose to accelerated computing and generative AI.”
Anticipating further expansion, Huang emphasized the company’s optimistic outlook, stating, “Large language model startups, consumer internet companies, and global cloud service providers were the first movers, and the next waves are starting to build.” Highlighting the ongoing growth engines, Huang emphasized the significant role of AI foundry services and Nvidia AI Enterprise software. As he succinctly put it, “The era of generative AI is taking off,” signifying Nvidia’s continued momentum in capitalizing on the evolving landscape of artificial intelligence.
Is OpenAI Stock profitable?
OpenAI is a company that uses artificial intelligence to create cutting-edge technology. Although the company hasn’t released its financial statements, it has been reported that OpenAI is currently not profitable and has experienced losses of around $540 million in 2022, which doubled from the previous year. However, OpenAI’s revenue is growing rapidly, with a monthly run rate of over $100 million, which is significantly more than the $28 million revenue generated in 2022. To fund its development plans, OpenAI has changed its structure from a non-profit company to a hybrid for-profit/non-profit called a “capped-profit” company, which allows investors and employees to participate in profits up to a defined cap.
Conclusion
OpenAI is a leader in generative AI, and ChatGPT is a reliable AI assistant with great potential. OpenAI’s advanced technology has the potential to bring a new era where AI plays a significant role in various aspects of society. Although you can’t invest directly in OpenAI, you can invest in the stocks of companies that are likely to benefit from its advancements in AI.
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