OpenAI is reportedly in talks to raise several billion dollars in a new funding round, potentially boosting the startup’s valuation above $100 billion, per the Wall Street Journal.
Leading the funding round is venture capital firm Thrive Capital, which is expected to contribute approximately $1 billion, the WSJ has learned. Microsoft, a major investor in OpenAI, is also anticipated to participate.
Biggest infusion of outside capital since Microsoft
This new round of funding would represent the biggest injection of outside capital into OpenAI, following Microsoft’s $10 billion investment in January 2023. The company has been at the forefront of the AI arms race in Silicon Valley, striving to develop the most advanced AI systems and dominate the industry.
OpenAI’s previous valuation was $86 billion, established late last year when employees sold existing shares. Thrive Capital, founded by Josh Kushner, has already invested several hundred million dollars into OpenAI and maintains a close relationship with CEO Sam Altman.
While the specific details of other investors participating in the funding round remain undisclosed, competition in the AI space is fierce. Google, Amazon, and Meta Platforms are all actively investing in and developing their own AI technologies.
Maintain ChatGPT market leadership
ChatGPT, OpenAI’s flagship product, has garnered immense popularity with hundreds of millions of monthly users. To maintain its market leadership, OpenAI will need to continue investing heavily in research and development, ensuring that its AI models remain at the cutting edge of technology.
The potential for AI to revolutionize industries and the way people work has attracted significant investor interest. However, it’s important to note that AI is still a speculative business with substantial risks. OpenAI’s revenue, while growing, is not yet commensurate with the massive investments being made in the industry.
The evolving relationship between OpenAI and Microsoft is also a factor to consider. While Microsoft is likely to remain a significant investor, the two companies are also increasingly competing with each other and forming new partnerships.
