OpenAI on track for $100B funding, valuation may top $850B
What's the story
OpenAI, the company behind ChatGPT, is close to completing the first phase of a new funding round. The capital raised in this round is expected to exceed $100 billion, according to reports. This significant financing deal would provide the AI start-up with additional capital.
Investor details
Funding round led by strategic investors
The first tranche of the funding round will mainly be contributed by strategic investors such as Amazon, SoftBank, NVIDIA, and Microsoft. If these companies invest close to the upper limits of what has been discussed, their contributions would add up to nearly $100 billion. The companies are expected to finalize their allocations by the end of this month.
Valuation forecast
OpenAI's valuation to exceed $850 billion
With the new funding round, OpenAI's total valuation could exceed $850 billion, higher than the previously expected $830 billion. However, the company's pre-money value will remain at $730 billion. The second tranche of this deal, which will include venture capital firms and sovereign wealth funds, is expected to close later and could significantly increase the total amount raised.
Funding distribution
Corporate investors' contributions to be disbursed in tranches
Corporate investors' contributions are expected to be disbursed in tranches over the course of this year. Amazon is expected to invest up to $50 billion, SoftBank up to $30 billion, and NVIDIA has discussed investing $20 billion. As part of its partnership with Amazon, OpenAI is expected to expand its use of the tech giant's chips and cloud computing services.