OpenAI seeks funding at $150 billion valuation, a 74% increase
What's the story
OpenAI, a leading artificial intelligence (AI) company, is reportedly in discussions to raise funds at an impressive valuation of $150 billion. This potential move would further solidify its position as one of the world's most valuable start-ups. The AI firm is known for creating ChatGPT, a popular chatbot that has significantly contributed to its prominence in the AI industry.
Funding details
OpenAI plans to raise $11.5 billion in total
According to Bloomberg, OpenAI is considering raising $6.5 billion from investors and securing an additional $5 billion in debt through a revolving credit facility from banks. If successful, this new valuation would mark a significant 74% increase from the company's previous valuation of $86 billion earlier this year. However, neither OpenAI nor Thrive Capital, the alleged lead investor in this funding round, have officially confirmed these discussions.
Industry impact
OpenAI's success sparks renewed interest in AI
OpenAI, led by Sam Altman and supported by tech giant Microsoft, has reignited Silicon Valley's interest in AI. The company's success with ChatGPT has positioned it as a key player in the AI sector. In recognition of its achievements, Forge Global Holdings recently included OpenAI in its "Private Magnificent Seven" startups list - a group that comprises publicly traded mega-cap stocks like Microsoft, Apple, Alphabet (Google's parent company), and Tesla among others.
Market trends
OpenAI's funding strategy amid market volatility
The proposed capital infusion could enable OpenAI to remain private for an extended period. Many successful startups are currently opting to stay private due to regulatory costs and stock market volatility. Alternative capital sources like private equity firms and funds such as Destiny Tech100 and ARK Venture Fund have also lessened the appeal of initial public offerings (IPOs).