OpenAI seeks $30B at $1.4 trillion valuation
What's the story
OpenAI, the company behind ChatGPT, is in talks with several United Arab Emirates (UAE) investment funds. The Abu Dhabi-based MGX is one of them. As per Bloomberg, the discussions are centered around a major financing round where OpenAI is looking to raise at least $30 billion at a valuation of about $1.4 trillion.
Investment potential
Investment to boost AI capabilities
The UAE investment funds, including MGX, are said to be considering a collective investment of as much as $10 billion in this financing round.
The move is part of OpenAI's strategy to boost its AI capabilities while delaying its initial public offering (IPO) until at least next year.
This delay is due to the company's focus on AI safety efforts.
Funding round
Involvement of other investors
Along with the UAE funds, BlackRock is also in talks to join this major funding round.
Other existing backers like Thrive Capital and Andreessen Horowitz have also shown interest in investing more money.
The University of California's endowment fund, an existing investor, has held talks with OpenAI about joining this round as well.
Valuation strategy
Fixed price offer to investors
Unlike traditional venture rounds, OpenAI is offering its $1.4 trillion pre-money valuation to investors as a fixed price. This is despite not having chosen a lead investor yet.
Normally, investment firms propose terms for funding rounds and negotiate with the company about leading it.