OpenAI Reportedly in Talks to Close a New Funding Round at Over $100 Billion Valuation

In Brief

Posted: August 28, 2024, 2:24 PM PDT

Image Credits: Chris Ratcliffe/Bloomberg / Getty Images
Kyle Wiggers

ChatGPT creator OpenAI is reportedly in talks to raise a massive tranche of cash led by previous backer Thrive Capital, at a valuation of more than $100 billion. That’s substantially higher than OpenAI’s previous $86 billion valuation, and by far the highest valuation of any AI startup to date.

Table of Contents

The Details

Thrive will reportedly throw in around $1 billion for its part. Microsoft is also expected to participate, according to The Wall Street Journal (WSJ), which has the story. It’s unclear whether other investors would join the round. Khosla Ventures, Infosys, and Y Combinator are among OpenAI’s other existing backers.

The Need for Funding

OpenAI needs the money. The WSJ says its annualized revenue eclipsed $3.4 billion early this year. However, The Information reports that OpenAI is on track to lose nearly $5 billion by year-end and has already burned through $8.5 billion on AI training and staffing.

Background

OpenAI’s previous funding round in January 2023 saw Microsoft invest nearly $10 billion in the company. Since then, OpenAI has continued to grow rapidly, with its valuation increasing significantly.

Why the High Valuation?

So, why is OpenAI’s valuation so high? One reason is that the company’s technology is highly sought after. ChatGPT, OpenAI’s conversational AI model, has become incredibly popular since its release, and many companies are looking to invest in similar technologies.

What This Means for the Future

This new funding round will likely help OpenAI continue to grow and expand its offerings. With a valuation of over $100 billion, OpenAI is now one of the most valuable AI startups in the world.

The Impact on the Industry

OpenAI’s high valuation is also a reflection of the growing interest in AI technology. As more companies invest in AI research and development, we can expect to see even more innovative applications of this technology in the future.

What’s Next?

While the details of the funding round are still unclear, one thing is certain: OpenAI is poised for continued growth and success. With its high valuation and significant investment from leading backers, the company is well-positioned to continue pushing the boundaries of AI research and development.

The Key Players

OpenAI: The creator of ChatGPT, a conversational AI model that has become incredibly popular since its release.
Thrive Capital: A previous backer of OpenAI that will reportedly throw in around $1 billion for its part in the new funding round.
Microsoft: A leading investor in OpenAI that is expected to participate in the new funding round.
Khosla Ventures, Infosys, and Y Combinator: Other existing backers of OpenAI that may join the new funding round.

The Road Ahead

As OpenAI continues to grow and expand, we can expect to see even more innovative applications of AI technology. With its high valuation and significant investment from leading backers, the company is well-positioned for continued success.

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