Key insights
- Robinhood's venture fund invested $75 million in OpenAI, aiming to broaden retail investor access to private tech companies. This move signals Robinhood's expansion into a broader financial services platform and a thawing of tensions with OpenAI. Robinhood's shares rose 3.6% on the news, reflecting positive market sentiment.
April 22 (Reuters) - Robinhood's venture fund has invested $75 million in ChatGPT maker OpenAI, it said on Wednesday, aiming to broaden retail investor access to high-profile, privately held technology companies.
OpenAI has become one of the most closely watched companies in generative AI, propelled by the viral success of its chatbot ChatGPT.
Its rise has helped fuel a wave of investment and competition across Big Tech and startups alike, as companies race to build and commercialize AI tools, drawing billions of dollars into the sector.
Robinhood Ventures Fund I, which went public in March, aims to give retail investors access to private company investments long dominated by Silicon Valley's largest venture capital firms.
Once known mainly as a trading app for retail investors, Robinhood has since expanded into a broader financial services platform, helping push its market capitalization to nearly $78 billion.
The company's shares were last up 3.6% before the bell on the news.
The investment also signals a thawing of tensions between the two companies, which flared last summer when Robinhood said it would grant 5 euros worth of blockchain-based "stock tokens" for private companies, including OpenAI and SpaceX.
Tokenized equities mix traditional finance with crypto-like trading, and have been gaining traction among international investors due to better access, flexible trading hours and lower costs.
OpenAI later said it had not partnered with Robinhood, did not endorse the tokens and was not involved in the offering.
(Reporting by Manya Saini in Bengaluru; Editing by Diti Pujara and Tasim Zahid)