OpenAI is reportedly in the early stages of discussions aimed at securing a fresh round of funding, potentially valued at or above $100 billion, as informed by individuals familiar with the matter. Such a deal would solidify the position of the ChatGPT creator as one of the most esteemed startups globally. Those acquainted with the situation revealed that talks have involved potential investors at preliminary stages, though specifics such as terms, valuation, and the timeline for this funding round remain fluid and subject to change.
Should this funding materialize according to the current plan, it would position the AI enterprise as the second-most valuable startup in the United States, trailing only Elon Musk’s Space Exploration Technologies, based on data from CBInsights.
When approached for comment, OpenAI declined to provide any statement on the matter.
Separately, the company is on track to finalize a distinct tender offer by early January, allowing employees to sell their shares at an $86 billion valuation, a report previously covered by Bloomberg. This transaction, led by Thrive Capital, reportedly encountered greater investor demand than the available shares, as per individuals familiar with the proceedings.
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, and spurred a new appreciation for the promise of AI that changed the tech industry landscape within a few months.
Amazon.com and Alphabet have since poured billions into OpenAI-rival Anthropic. Salesforce led an investment into Hugging Face that valued it at $4.5 billion, and Nvidia, 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 is reportedly in discussions to secure a substantial funding round ranging from $8 billion to $10 billion from G42, as disclosed by an anonymous source familiar with the matter. The exact relationship between this potential funding and the chip venture remains ambiguous.
CEO Sam Altman of OpenAI has been actively pursuing capital for the chip project known internally as Tigris. The primary objective is to develop semiconductor technology that can rival the offerings of industry giant Nvidia, a dominator in the AI chip market, according to a previous report by Bloomberg News.
Notably, G42 had previously announced a collaboration with OpenAI in October, aiming to provide cutting-edge AI solutions to the UAE and surrounding markets; however, financial specifics were not disclosed. Founded in 2018, G42 is headed by Sheikh Tahnoon bin Zayed Al Nahyan, serving as the UAE’s national security adviser and chair of the Abu Dhabi Investment Authority.
OpenAI recently faced a period of uncertainty following the abrupt dismissal of CEO Sam Altman by the board. This event led some investors to consider devaluing their stakes in the company. However, after a five-day leadership turmoil, Altman was reinstated, and a new board was appointed. The company has since focused on reassuring its customers by signaling a renewed commitment to its product development in the aftermath of these internal disruptions.