5 Ways to Invest in OpenAI (ChatGPT)

OpenAI is a company that is developing artificial intelligence (AI).

In November 2022, they released ChatGPT, an AI chatbot based on a large language model (LLM) that can generate detailed and human-like responses to user queries.

ChatGPT quickly went viral, shattering user growth records and reaching 100 million users in just two months. The launch of this tool has ushered in a new wave of development in artificial intelligence all over the world.

OpenAI also offers an API for developers, which is being used by start-ups and companies all over the world to add AI capabilities to their applications.

In addition, they have other products like Dall-E, an AI system that can create images and art from a text-based prompt, and Sora, a text-to-video generator.

OpenAI's main mission is to develop artificial general intelligence (AGI), which is the type of AI that can learn, think, and solve tasks like a human.

Can you buy OpenAI stock?

OpenAI is not a public company and cannot be bought in your typical brokerage.

There is no OpenAI stock symbol because it's a private company that hasn't yet made its shares available to the public via an initial public offering (IPO).

And, based on its mission, revenue trajectory, and the number of venture capital funds that want to own a stake, it may not ever need to go public.

Fortunately, you don't need to wait for it to go public to gain exposure to OpenAI and ChatGPT.

Here are five ways to invest in OpenAI stock today, despite it being a private company.

1. Invest indirectly (via Microsoft)

If you're not an accredited investor, there's no way for you to buy OpenAI stock directly. The best you can do is invest indirectly through Microsoft (MSFT), which has close ties to the lab.

To date, Microsoft has invested $11 billion in the lab. It now owns 49% of the company and is entitled to up to 75% of its profits.

Microsoft's first investment came in 2019 and totaled $1 billion. Then, Microsoft invested another $10 billion in early 2023. Its stake is now worth ~$43 billion.

Since it can be purchased in any stock brokerage account, buying Microsoft stock is the simplest way for investors to gain exposure to OpenAI. 

Do you have a brokerage account?

If you don't have a brokerage account, we recommend Public. Invest in stocks, ETFs, Treasuries, and cryptocurrencies, all on one of the most well-designed investing platforms.

However, if you're considering an investment, there are a few things to keep in mind.

Microsoft's $3.07 trillion market cap will be relatively uninfluenced by its 49% stake in the ~$86 billion startup, unless OpenAI ends up becoming much bigger than it is now.

On the other hand, Microsoft has already begun integrating OpenAI's technology into many of its core products (such as Office, Windows, GitHub, and Bing). These integrations are collectively known as “Copilots.”

The best example of this is GitHub Copilot, which costs $10–20 per month and has surpassed one million paid users just 18 months after launch.

According to Microsoft's 2023 annual report, GitHub Copilot is “fundamentally transforming developer productivity, helping developers complete coding tasks 55 percent faster.”

Furthermore, Copilot is being rolled out to Office 365, of which there are 345 million paid members. I don't think it's overstating it to say that Microsoft, thanks to OpenAI, is in a league of its own regarding AI and AI integration.

Microsoft is planning to sell each Office Copilot subscription for $30 per month, on top of existing prices. Assuming this increases employee productivity, even by just a few percentage points, these will be no-brainer investments for businesses.

If 100 million users pay for a Copilot, that will add $36 billion in annual recurring revenue to Microsoft's top line, or an increase of about 18% above its current revenue of ~$200 billion.

Microsoft's Azure is also the second biggest cloud computing provider (after Amazon) and a lot of the computing for AI applications is likely to happen in the cloud.

This could help support the long runway of continued revenue growth in their cloud segment.

2. Buy shares directly (from current shareholders)

Hiive is a secondary marketplace where accredited investors can buy shares of private, VC-backed startups.

Accreditation requirements

To qualify as an accredited investor, you must meet one of the following criteria:

• Have an annual income of $200,000 individually or $300,000 jointly.
• Have a net worth that exceeds $1,000,000, excluding your primary residence.
• Be a qualifying financial professional with a Series 7, 65, or 82 license.

As of the time of this writing, there is 1 listing of OpenAI stock available for purchase:

While there's only 1 listing for OpenAI, you may also be interested in Databricks or Figure AI, which are some of the most actively traded securities on Hiive right now. In all, there are over 2,000 private companies listed on the site.

On Hiive, sellers are typically employees, venture capital firms, or angel investors. Each seller can set their own asking price and quantity of volume offered.

Buyers can either accept asking prices or place bids and negotiate directly with the sellers. Plus, unlike some of its competitors, Hiive does not charge any fees for buyers.

Register for Hiive

3. Invest in leading AI companies

There is a saying that in a gold rush, the people selling shovels make more money than the prospectors. In the context of investing in the AI “gold rush,” this would translate to owning the companies that produce the hardware that makes AI possible.

The two most relevant companies here are NVIDIA, which sells the best AI chips, and TSMC, which runs the factories used to make the chips.

Nvidia

Likely the biggest publicly traded winner in AI so far is Nvidia (NVDA).

Since bottoming in October 2022, shares of NVDA have rallied more than 550%, largely due to AI demand. Nvidia reported revenue of $22.1 billion last quarter, up 265% YoY, and EPS of $4.93, up 769% from last year.

Nvidia has a dominant market-leading position in developing the chips used to train and run supercomputers and high-powered AI networks.

It also provides the best “entire package” of AI-enterprise products, complete with hardware, software, and support services.

The bulk of its revenue now comes from its Data Center business. This segment's revenue surged to $18.4 billion last quarter, up 409% YoY.

If you're bullish on the future of AI, it's hard to imagine a world where Nvidia isn't much bigger in the future than it is right now.

Unfortunately, you won't be alone in this investment. Shares are trading at 38x the next twelve months' forecasted earnings, and over 67x the trailing twelve months' earnings.

Taiwan Semiconductor

Most of the chips that are being built to satisfy the demand for AI applications are made by Taiwan Semiconductor Manufacturing Company (TSM).

For example, all of Nvidia's advanced AI chips are manufactured by TSMC.

If the demand for AI computing continues to grow, then TSMC is likely to be one of the main beneficiaries.

More companies with AI exposure

Here are a few other tech companies with exposure to AI:

1. Alphabet (GOOG, GOOGL): Google has invested heavily in AI for years and may be the biggest beneficiary from AI-powered search. Their Gemini (formerly Bard) chatbot is also one of the biggest competitors to ChatGPT, plus the Google Cloud Platform will likely be running a lot of AI applications in the future.
2. Amazon (AMZN): Amazon runs Amazon Web Services (AWS), which is the world's biggest cloud computing provider. A lot of future AI computing is likely to be run on their servers.
3. Meta Platforms (META): Meta's artificial intelligence lab (Meta AI) was launched in 2013. Since that time, Meta has poured billions of dollars into developing generative AI, computer vision, and human speech processing technologies.

There are also other private companies you may be interested in, such as Figure AI, Anthropic, and Scale AI.

4. Invest in exchange-traded funds

Instead of buying an individual stock, you may want to diversify across a broad range of companies focused on similar technology via an ETF:

1. Roundhill Generative AI & Technology ETF (CHAT): This ETF invests in companies focused on generative AI, the same technology powering ChatGPT.
2. ROBO Global Robotics & Automation ETF (ROBO): This fund buys companies from around the world that are focused on robotics and automation.
3. First Trust Nasdaq Artificial Intelligence and Robotics ETF (ROBT): This is another global fund focusing on artificial intelligence and robotics companies.
4. Global X Robotics & Artificial Intelligence ETF (BOTZ): This fund focuses on companies involved in the development and production of robots or AI.
5. iShares Exponential Technologies ETF (XT): This iShares fund invests in disruptive information technology companies.

While none of these ETFs own OpenAI, they will give you general exposure to the artificial intelligence industry.

5. Wait for the OpenAI IPO

The only way for retail investors to buy shares of OpenAI directly is if it went public. At this point, it's unknown if the lab will ever have an IPO.

While the lab was set up as a non-profit, those plans went out the window once it began taking investments from for-profit companies (like Microsoft) with commercial interest in its products.

It now has a rather ambiguous structure: OpenAI Global is a for-profit entity which is governed by OpenAI Inc, a non-profit entity.

This structure allows OpenAI to attract capital and talent, competing with leading for-profit tech companies, while also adhering to its mission, which is “to ensure that artificial general intelligence benefits all of humanity.”

The $86-billion non-profit is on pace to generate $2 billion in revenue.

If the parent company ever decides to spin off its revenue-generating subsidiary, you can expect it to be a blockbuster IPO. You'll need a brokerage account if it goes public.

If you're in the market, we recommend Public. Invest in stocks, ETFs, Treasuries, and cryptocurrencies, all on one of the most well-designed investing platforms.

Frequently asked questions

Who owns OpenAI stock?

OpenAI began with an initial seed funding of $50 million from Elon Musk, who was a co-founder of the company before leaving in 2018.

The lab has raised a total of about $11.3 billion from 15 investors over seven funding rounds, with the vast majority of that funding — $11 billion — coming from Microsoft.

In April 2023, OpenAI raised $300 million from Thrive Capital, SVA, Andreessen Horowitz, Founders Fund, Alphabet, Wisdom Ventures, K2 Global, Sequoia Capital, and Tiger Global Management. The round valued the company at around $28.7 billion.

In October 2023, Thrive Capital announced it was leading another deal to purchase OpenAI shares from employees via a tender offer, valuing the company at $86 billion, or almost 3x more than the transaction that took place six months earlier.

Does Elon Musk own a stake in OpenAI?

While Elon Musk was a co-founder and originally invested $50 million to start the lab, he sold his stake to Microsoft and left the company in 2018.

Musk had reportedly committed $1 billion in support before pulling out over disagreements about the speed of OpenAI's advancements.

Since then, he has repeatedly criticized the lab for not placing enough emphasis on safe AI development and has recently filed a lawsuit claiming CEO Sam Altman breached their contract by abandoning their original mission to focus on profits.

In April 2023, Musk incorporated X.AI, a rival AI firm.

How much is OpenAI worth?

Here's a look at OpenAI's valuation history:

Its $86 billion valuation makes it the third most valuable private company in the world, behind only ByteDance (the parent company of TikTok) and SpaceX.