SAN FRANCISCO, Sept. 12, 2024 – OpenAI, the leading artificial intelligence (AI) company, is reportedly in talks to raise $65 billion from investorsat a valuation of $150 billion, according to sources familiar with the matter. This new valuation, excluding the funds raised, significantly surpasses the $86billion valuation from an earlier offer earlier this year, solidifying OpenAI’s position as one of the most valuable startups globally.
The company is also in discussions to secure $50 billion in revolving credit from banks, further bolsteringits financial standing. These talks are ongoing, and the terms could still change.
Thrive Capital is said to be leading this funding round, with Microsoft, OpenAI’s largest investor, also participating. Apple and Nvidia are reportedly innegotiations to join the investment. Nvidia, in particular, is rumored to be considering a $100 million investment.
OpenAI CFO Sarah Friar confirmed the company’s pursuit of new funding last month, without disclosing specifics. Friar stated that the funds would be used to acquire more computing power and cover other operational expenses.
OpenAI’s move to secure funding from Wall Street banks mirrors a trend among large tech startups seeking to strengthen their financial position. Companies like Meta Platforms Inc., Uber Technologies Inc., and DoorDash Inc. all sought credit lines from Wall Street before their initial public offerings (IPOs), often to solidify relationships with banks.Historically, these banks are often rewarded with larger commitments during the IPO process. In return, lenders sometimes offer more favorable financing terms.
Founded in 2015, OpenAI has been at the forefront of the tech industry’s rapid shift towards AI. Its user-friendly chatbot, ChatGPT, debuted in 2022 and sparked a wave of investment. The company’s products, capable of generating realistic images and human-like text with a few prompts, have captivated consumers and investors alike.
Initially established as a non-profit organization, OpenAI transitioned into a for-profit startup in 2019.Since then, Microsoft has invested a total of $130 billion in OpenAI, securing a 49% stake in the company.
Despite significant changes in leadership, with only a few remaining from the original founding team, OpenAI has undergone a comprehensive board restructuring and expanded its executive ranks.
This latestfunding round underscores OpenAI’s continued growth and ambition. The company’s focus on acquiring more computing power suggests its commitment to developing even more sophisticated AI models and expanding its product offerings. This move, coupled with its aggressive fundraising strategy, positions OpenAI to play a dominant role in shaping the future of AI.
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