How to Buy Open AI Stock? [2023] | Step-by-step

Summary: OpenAI is a privately owned company not listed on any stock exchange, so the general public cannot directly buy OpenAI stock. However, OpenAI has received funding from a number of firms, and by investing in them, investors still have the opportunity to own stocks in the artificial intelligence (AI) sector indirectly.

The most substantial funding OpenAI has received came from Microsoft, a publicly traded company you can invest in on online exchanges such as eToro. In this guide, we’ll provide you with several options in regard to the most popular AI-related investment choices.

What is OpenAI?

OpenAI was founded in 2015 by Elon Musk and his partners, including the company’s current CEO Sam Altman. The team’s mission was, and still is, to improve AI technology ethically, that is, with careful consideration of its potential misuse.

OpenAI IPO

The initial public offering, or simply IPO, refers to the process during which a previously privately owned company first starts to make its stock public.

Unfortunately, OpenAI has not yet entered the initial public offering stage, and there seem to be no plans for it to go public yet at the time of writing (Q3 2023). That means OpenAI stock is still not available to the general investing public.

Nevertheless, private investors can explore alternative investment options, either by investing in companies that own shares in OpenAI, such as Microsoft (NASDAQ: MSFT), or by investing in companies involved with the AI sector, such as Nvidia (NASDAQ: NVDA), Intel (NASDAQ: INTC), and Alphabet (NASDAQ: GOOG).

Should you invest in Open AI?

The AI industry is all the rage nowadays, so from the hype angle, investing in OpenAI and similar companies might seem like an appealing idea, even with all the ethical concerns raised about the potential misuse of AI for purposes such as deepfakes.

When it comes to OpenAI specifically, the company is generally secretive about its future plans. However, the recent multi-billion investments Microsoft has made in the company seem to point toward a new era of not more advanced but also commercialized artificial intelligence, which might attract future investors.

Read more  Family Investment Company

Still, caution is advised. Despite being at the top of the AI game, ChatGPT saw a drop in downloads of almost 10% in June 2023. While the numbers might indicate market saturation, i.e., increased demand for AI chatbots and more competition, it is also possible that they could indicate a shift in consumer sentiment or the waning of public interest in AI intelligence.

Which scenario is more likely is hard to tell, but some interesting facts seem to indicate that the former one is more credible. For example, over 70% of UK investors believe that ChatGPT will be able to give accurate financial advice in the future. This indicates that AI tools such as those developed by OpenAI might see more and more uses in stock trading in general.

How to buy OpenAI stock?

As mentioned, OpenAi shares are still not publicly traded. However, that does not mean you can’t get any exposure to the company, as there are other firms you can invest in that are in tight partnerships with OpenAI, usually as major shareholders and investors that have a high stake in the company.

How to buy OpenAI stock? Step-by-step process

To invest in OpenAI indirectly — i.e., to buy shares in some of OpenAI’s major investors — simply take the following steps:

Step 1: Research the market and choose a company to invest in

AI technology is slowly permeating our lives, finding its way to our smartphones, computers, and cars, as well as automatizing many of the routine tasks in industries such as software development and chip manufacturing.

Consequently, an ever wider range of investors from various sectors of business and society are both attracted by AI and concerned with its economic ramifications. What makes a concrete analysis of the AI market tricky is the speed at which AI technology is developing, coupled with the multiplicity of opinions various individuals have on the topic.

Nonetheless, some reasonable predictions can be made about the future of OpenAI. In January 2023, for example, Microsoft invested $10 billion in ChatGPT, the company’s main product, which is an exceptionally large investment if we consider the fact that generative AI is technically still in its inception.

As Microsoft is a conglomerate giant with a presence in a number of industries, its optimism in regard to the value of OpenAI and its products alone is enough to attract a lot of potential investors.

As of Q3 2023, the five most popular investment choices in the AI sphere are:

  1. Microsoft (MSFT)
  2. C3ai.Inc (AI)
  3. Alphabet (GOOG)
  4. NVIDIA (NVDA)
  5. Upstart (UPST)
Read more  How to Invest in EV Charging Stations

1. Microsoft

Microsoft has firmly established itself as a leader in the AI sector, thanks to its multi-billion investments in ChatGPT. This enthusiasm in regard to AI helped bolster Microsoft’s reputation as a technology conglomerate with a strong presence in all emerging and growing sectors. Consequently, many set their sights on AI as well.

Microsoft’s dedication to AI became even more evident with the Windows 11 update. Namely, the new operating system (OS) introduced the Bing AI chatbot, which enables users to easily ask questions directly in its search bar. What’s more, it seems like Microsoft is planning to introduce AI functionalities to other aspects of its OS, such as the task manager. This might bring more users in contact with artificial intelligence, solidifying Microsoft’s position in the industry.

Microsoft stock price today

2. C3ai.inc

C3ai has been known for its unstable performance in the stock market, but the company saw a 5.6% year-on-year improvement between 2022 to 2023. Moreover, its recent switch to consumption-based pricing models could lead to increased profits, as new customers are more likely to appreciate the new pricing policies. After all, consumption-based pricing is the industry standard for a reason. However, it must be noted that, compared to the previous subscription-based pricing plans, the new model might lead to lower revenue predictability. Therefore, caution and higher risk tolerance are advised.

C3ai.inc stock price today

3. Alphabet

Alphabet stock is pretty much a no-brainer buy. Google’s parent company has been leveraging AI to enhance most of its operations, including YouTube and its dominant search engine. Alphabet has also ventured into the generative AI space, releasing Bard as a direct competitor to OpenAI’s ChatGPT, showing its rock-solid commitment to AI.

Furthermore, Alphabet’s diversified portfolio provides additional growth prospects, should the company wish to expand its AI operations. A good number of Alphabet’s platforms benefit from a flywheel effect, that is, they grow thanks to user engagement, data collection, etc. Consequently, with its innovative AI capabilities and strong market presence, Alphabet stands to profit greatly from the democratization of AI.

Alphabet stock price today

4. NVIDIA

AI is now NVIDIA’s main focus, which is hardly surprising considering the company managed to secure around 90% of the chip market share following the initial AI hype phase. As, cutting-edge GPUs are essential in developing innovative AI applications and training extensive language models, NVIDIA is in a good position to remain at the top of the game for the foreseeable future, although its competition is not slacking.

Read more  WHOOP Stock: Will there be an IPO Next Year?
NVIDIA stock price today

5. Upstart

Upstart has made some interesting moves in the automotive industry, introducing its AI solutions to the sector and catching the eyes of companies like Volkswagen and Mercedes. This is a significant development for the company, as the automotive market is one of the largest in the world. Now, Upstart seems to be on the right track to explore new, less volatile growth avenues. If the company can perform well in the automotive industry, it could potentially lead to better overall performance and, ultimately, higher stock value.

Upstart stock price today

Step 2: Set up a brokerage account

The first step when investing in OpenAI stock is to find a reliable broker. To find a broker that will accommodate your investment goals and strategies, consider factors such as:

  • Reputation: Choose only brokers with a strong reputation and licenses by financial bodies such as the Financial Conduct Authority (FCA) or Financial Industry Regulatory Authority (FINRA);
  • Fees: Naturally, platforms that offer lower fees are preferable, but keep in mind that low fees are not the only crucial factor to consider (there is also ease of access, security, prompt customer support, analytics tools, etc.);
  • Offerings: Try looking for a broker with a wide range of investment products, such as mutual funds, ETFs, or options.

Step 3: Fund your account

When you make an account at your new broker, you have to transfer some funds to it. Typically, you can do that by simply linking it to your bank account or another payment method like PayPal (PYPL).

Step 4: Place a trade

Once you have transferred your funds, it’s time to place a trade to buy shares of an AI company.

For example, if you are investing in Microsoft on eToro, head to the broker’s website and look up Microsoft’s ticker symbol (MSFT) and specify how many shares you want to buy. Then, choose your preferred order type (market, limit, options) and finalize the purchase.

Step 5: Monitor and manage your investment

After acquiring your shares, you must consistently and attentively monitor your investment. Staying informed about the performance of the company in which you have invested and its leadership, the AI industry and its changing trends, as well as any significant news or developments that could impact relevant stock prices. For example, more than 100,000 ChatGPT accounts recently went on sale on the dark web.

Top AI stocks to buy in 2023

Company2023 Q3 Market capitalization

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

FAQs about how to buy OpenAI stock