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OpenAI seeks fresh funding round at valuation over $100 billion OpenAI seeks fresh funding round at valuation over $100 billion

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OpenAI seeks fresh funding round at valuation over $100 billion – Crypto News

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OpenAI is in early discussions to raise a fresh round of funding at a valuation at or above $100 billion, people with knowledge of the matter said, a deal that would cement the ChatGPT maker as one of the world’s most valuable startups.

Investors potentially involved in the fundraising round have been included in preliminary discussions, according to the people, who asked not to be identified to discuss private matters. Details like the terms, valuation and timing of the funding round haven’t yet been finalized and could still change, the people said.

If the funding round happens as planned, it would make the artificial intelligence darling the second-most valuable startup in the US, behind only Elon Musk’s Space Exploration Technologies Corp., according to data from CBInsights. 

OpenAI declined to comment. 

The company is set to complete a separate tender offer in early January, which would allow employees to sell their shares at a valuation of $86 billion, Bloomberg previously reported. That is being led by Thrive Capital and saw more demand from investors than there was availability, people familiar with the matter have said.

OpenAI’s rocketing valuation mirrors the AI frenzy it kicked off one year ago after releasing ChatGPT, a chatbot capable of composing eerily human sentences and even poetry in response to simple prompts. The company became Silicon Valley’s hottest startup, raising $13 billion to date from Microsoft Corp., and spurred a new appreciation for the promise of AI that changed the tech industry landscape within a few months. 

Amazon.com Inc. and Alphabet Inc. have since poured billions into OpenAI-rival Anthropic. Salesforce Inc. led an investment into Hugging Face that valued it at $4.5 billion, and Nvidia Corp., which makes many of the semiconductors that power AI tasks, said earlier this month it made more than two dozen investments in 2023. 

OpenAI has also held discussions to raise funding for a new chip venture with Abu Dhabi-based G42, according to people with knowledge of the matter. 

The startup has discussed raising between $8 billion and $10 billion from G42, said one of the people, all of whom requested anonymity to discuss confidential information. It’s unclear whether the chips venture and wider company funding efforts are related.

OpenAI Chief Executive Officer Sam Altman had been seeking capital for the chipmaking project, code-named Tigris. The goal is to produce semiconductors that can compete with those from Nvidia, which currently dominates the AI chip market, Bloomberg News reported last month.

In October, G42 announced a partnership with OpenAI “to deliver cutting-edge AI solutions to the UAE and regional markets.” No financial details were provided. The firm, founded in 2018, is led by Sheikh Tahnoon bin Zayed Al Nahyan, the UAE’s national security adviser and chair of the Abu Dhabi Investment Authority.

OpenAI’s future looked briefly uncertain after its board suddenly fired Altman earlier last month. At the time, some investors considered writing their stakes down to zero. But after five days of leadership tumult, Altman was brought back and a new board was named. The company has aimed to signal to customers that it’s refocusing on its products following the upheaval. 

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Published: 23 Dec 2023, 06:36 AM IST

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