OpenAI nears $30 billion funding round at $1.25 trillion valuation
Investing.com reported that OpenAI is close to raising up to $30 billion in a new funding round, giving the company a value of $1.25 trillion before the new money is added, CNBC reported Thursday. The company behind ChatGPT wants to raise money ahead of a possible initial public offering (IPO), while its rival Anthropic prepares to enter the stock market.
According to CNBC, which cited people familiar with the deal, investors from the United Arab Emirates and Coatue are leading the funding round. OpenAI told investors on Thursday that it hopes to get their signatures by the end of next week. However, the final amount of money it will raise is still being discussed.
The reported valuation is lower than the more than $1.4 trillion OpenAI was reportedly seeking in a funding round earlier this week, Reuters reported. The different figures suggest that the terms of the deal are still changing as the company works to secure promises of investment.
According to CNBC, OpenAI sees the funding round as an "opportunistic" way to raise money before a possible IPO. Chief Financial Officer Sarah Friar has told employees that the company could go public in 2027.
The timing matters because Anthropic is preparing for an expected IPO in November. The rival AI company wants a valuation of up to $2 trillion, but some investors have argued for a figure closer to $1.5 trillion. They have raised questions about how quickly the company's business can grow, Reuters reported.
OpenAI's push to raise money quickly reflects competition for investment from groups such as government-owned investment funds and large professional investors. Reuters reported that OpenAI wants to secure investment promises before Anthropic releases information as part of its IPO process. That information could lead investors to compare the two companies more closely, as both seek valuations worth trillions of dollars.
The new funding round would come after OpenAI raised $122 billion in March, when its value after the investment was $852 billion. The latest proposed valuation would be a major increase from that figure, although the new deal has not yet been finalized.
At the same time, OpenAI is negotiating a business agreement to obtain more computing capacity from the United Arab Emirates, CNBC reported. The deal could help the company meet the growing technology needs of its AI business. Developing and running more advanced AI models requires large amounts of investment.
The funding talks are taking place as conditions become more difficult for technology companies. Higher interest rates, changes in technology stock prices and closer investor attention to the cost of AI infrastructure have made it harder for companies across the sector to raise money and plan IPOs. Reuters reported Thursday that Anthropic was preparing to move forward with its planned stock market listing despite the uncertain market conditions.
The proposed funding round would give OpenAI more money before its expected IPO. It could also help set a reference point for the company's value before Anthropic enters the stock market. Whether investors will accept valuations close to $2 trillion for leading AI companies will depend on how they judge revenue growth, each company's position against competitors and the high costs of building AI infrastructure.
Original Article
OpenAI nears $30 billion funding round at $1.25 trillion valuation