U. of Michigan’s $20M OpenAI Stake Eyes $2B Return
ANN ARBOR, Mich. — The University of Michigan invested $20 million in OpenAI with an anticipated return of $2 billion, according to a legal report disclosed this week by MLive.com.
The investment would represent a 100-fold return if fully realized. The AI lab, maker of ChatGPT, reached a $300 billion valuation in a funding round earlier this year.
The disclosure adds Michigan to a list of university endowments placing capital into leading AI companies as institutional interest in artificial intelligence investments has grown.
Public universities investing endowment funds in private technology companies is not without precedent, but the scale of the projected return — from $20 million to a target of $2 billion — is uncommon by venture capital standards.
University endowments have in recent years increased allocations to venture capital and growth-stage technology investments.
OpenAI’s conversion from a nonprofit to a for-profit structure, which the company announced earlier this year, has created value for early investors. The company has attracted capital from sovereign wealth funds, major technology companies and academic institutions.
The University of Michigan’s endowment is among the largest at U.S. public universities. The school has not publicly commented on the specifics of the investment beyond what was disclosed in the legal report, according to MLive.com.
