OpenAI in Talks With Tech Giants to Secure New Funding Round Valuing the Company at Over $100 billion

OpenAI is engaged in discussions to secure a new funding round that could value the company at over $100 billion, as reported by The Wall Street Journal and Bloomberg. This anticipated valuation is already being reflected in secondary markets, where multiple firms tracking these transactions have observed investors valuing OpenAI at over $100 billion. For instance, securities trader Rainmaker Securities has reported offers valuing OpenAI up to $143 billion, while Caplight, a secondary data platform, estimated its worth exceeding $111 billion based on secondary market activities and historical financing rounds. This is prepared by SSP.

The primary deal, which OpenAI is negotiating, would be led by Joshua Kushner's Thrive Capital with a potential $1 billion investment, including possible contributions from tech giants like Microsoft, Nvidia, and Apple. Notably, Microsoft has already invested $13 billion, holding a 49% stake in the company. This funding round marks a significant leap from OpenAI’s last valuation of $86 billion during a secondary sale in September, as informed by Bloomberg.

Recent activities further increase OpenAI’s hype. Investors like Glen Anderson, co-founder of Rainmaker Securities, believe that the anticipated $100 billion-plus valuation, although potentially high, may indeed be justified considering the company’s obvious potential. This sentiment is echoed by Greg Martin, also from Rainmaker Securities, who highlights OpenAI’s significant revenue growth, projecting an annual recurring revenue (ARR) of $2 billion by year’s end.

In addition to its financial prowess, OpenAI continues to forge strategic partnerships. Apple plans to integrate OpenAI's ChatGPT into iOS, iPadOS, and macOS by the year's end. Sam Altman, OpenAI's CEO, emphasized the alignment of both companies’ missions to make advanced AI accessible to everyone. These integrations symbolize OpenAI's commitment to broadening AI's reach and usability.

Meanwhile, OpenAI's significant expenses raise eyebrows. Reports indicate that the company could expend around $7 billion on training and inference costs this year, losing about $5 billion overall. A major portion of these outlays stems from training and inference runs, largely supported by Nvidia’s GPUs.

As OpenAI navigates these investment ventures, its final valuation is yet to be official. Nevertheless, Glen Anderson predicts that this funding wave will catalyze increased secondary market activities around OpenAI and other AI competitors, potentially uplifting valuations across the sector. This excitement generated puts the spotlight on other AI firms like Anthropic, Cohere, and Hugging Face, resetting market expectations and inciting further investment flurries.