OpenAI seeks fresh funding at $1.2T valuation
What's the story
OpenAI, the artificial intelligence (AI) company behind ChatGPT, is in early-stage talks for a new funding round. The Financial Times reported that the discussions could value the company at around $1.2 trillion. If successful, this would be a significant jump from its last funding round's valuation of $852 billion in March.
Valuation boost
Proposed funding round to boost OpenAI's valuation by 41%
The proposed funding round, if successful, would increase OpenAI's valuation by some 41% from its March figure.
This would put the company among the most valuable private firms in the world.
The move comes as part of a strategy to finance the skyrocketing costs of building and running sophisticated AI systems.
IPO implications
Funding round dependent on IPO timeline
The decision to go ahead with this new funding round will depend on OpenAI's IPO timeline.
CEO Sam Altman had previously said that the company's much-anticipated IPO is still in the works but won't happen this year.
If accepted, the extra funding would give OpenAI leeway to possibly push back its public offering by a quarter or two.
Acquisition support
Funding could also be used for acquisitions
The tech giant's potential funding round could also be aimed at financing more mergers and acquisitions.
The company has already spent billions on buying start-ups such as Apple Inc. veteran Jony Ive's AI device start-up io and Astral, which makes Python tools for developers.
This new funding could help OpenAI stay ahead of its main competitor Anthropic, which raised funds in May at a $965 billion valuation.
Legal considerations
Legal restrictions and backers' exposure ahead of IPO
OpenAI is also looking into legal restrictions on what information it can share with private market investors before an IPO.
The company could use this funding round to let long-time backers increase their exposure ahead of the company's public offering.
This comes as Anthropic prepares for its own IPO in October and has chosen Nasdaq as its listing venue.