OpenAI in Early Talks for Funding at Over $100 Billion Valuation
- ByStartupStory | December 23, 2023
OpenAI, the company behind the popular ChatGPT maker, is reportedly in early talks to raise a new round of funding that could value the company at or above $100 billion. This potential deal would solidify OpenAI’s position as one of the world’s most valuable startups. Sources familiar with the matter revealed that discussions with potential investors have begun, although details such as the terms, valuation, and timing of the funding round are yet to be finalized and could still change.
If the funding round materializes as planned, it would position OpenAI as the second-most valuable startup in the United States, trailing only Elon Musk’s Space Exploration Technologies Corp., according to data from CBInsights. However, OpenAI has declined to comment on these developments.
Separately, the company is set to conclude a separate tender offer in early January, allowing its employees to sell their shares at a valuation of $86 billion. This offer, led by Thrive Capital, reportedly attracted more demand from investors than there were shares available.
OpenAI’s skyrocketing valuation reflects the surge of interest in artificial intelligence that the company ignited with the release of ChatGPT. The company’s success has attracted substantial investments, including $13 billion from Microsoft Corp., and has reshaped the landscape of the tech industry in a relatively short time.
In response to OpenAI’s rise, other tech giants like Amazon.com Inc. and Alphabet Inc. have invested heavily in rival AI companies. Salesforce Inc. led an investment in Hugging Face, valuing it at $4.5 billion, while Nvidia Corp. has also made significant investments in the AI space.
Additionally, OpenAI has reportedly been in discussions with Abu Dhabi-based G42 to raise funding for a new chip venture. The company is said to be seeking between $8 billion and $10 billion for this venture, which aims to develop semiconductors capable of competing with Nvidia’s dominance in the AI chip market.
OpenAI’s future briefly appeared uncertain after its CEO, Sam Altman, was abruptly fired by the board last month. However, Altman was reinstated after a brief leadership tumult, and the company has since focused on reaffirming its commitment to its products and customers.
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