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OpenAI asks investors to avoid five AI startups including Sutskever's SSI, sources say
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OpenAI asks investors to avoid five AI startups including Sutskever's SSI, sources say
Oct 2, 2024 9:46 PM

Oct 2 (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.

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