OpenAI, the artificial intelligence research company, is reportedly in early discussions to secure a new funding round based on a valuation of $100 billion or higher, as disclosed by individuals familiar with the matter, according to Bloomberg. This deal could elevate the developer of the ChatGPT program as one of the most valuable startups globally.
Investors who might participate in the fundraising round have been involved in preliminary discussions, as per anonymous sources. Details such as terms, valuation, and the timing of the funding round are yet to be finalized and are subject to change.
If the funding round proceeds as planned, it would position the artificial intelligence company as one of the most valuable startups in the United States, following Elon Musk’s Space Exploration Technologies Corp (SpaceX), according to CBInsights, a financial data analysis company.
OpenAI declined to comment on the matter.
The company is set to complete a separate tender offer in early January, allowing employees to sell their shares valued at $86 billion, as previously reported by Bloomberg. Thrive Capital, a U.S.-based venture capital firm, is leading the capital management, and the demand from investors reportedly exceeded what was available, according to insiders.
The skyrocketing valuation of OpenAI reflects the AI craze initiated by the company a year ago, following the launch of the ChatGPT program, a chatbot capable of composing human-like sentences and even poetry in response to simple prompts.
The company has become a prominent player in Silicon Valley, raising $13 billion so far, with Microsoft being a major investor.
Since then, both Amazon and Alphabet, Google’s parent company, have poured billions into Anthropic, a competitor to OpenAI. Salesforce Inc led a $4.5 billion investment in Hugging Face.
Nvidia Corp, a semiconductor manufacturer producing AI-powered chips, announced in the earlier part of this month that it made over twenty investments in 2023.
OpenAI has also engaged in discussions to raise funds for a new chip project with the artificial intelligence company “Group 42” (G42), known as G42 and based in Abu Dhabi, according to insiders.
The startup discussed raising between $8 billion and $10 billion from G42, according to one source. All requested anonymity to discuss sensitive information, and it remains unclear whether the chip projects and the broader funding efforts of the company are linked.
Sam Altman, CEO of OpenAI, has sought capital for the chip project, codenamed “Tigris,” aiming to produce semiconductors that can compete with those of Nvidia, currently dominating the AI chip market.
In October, G42 announced a partnership with OpenAI with the goal of “providing advanced AI solutions to the UAE and regional markets.” Financial details were not disclosed.
The future of OpenAI appeared uncertain briefly after its board abruptly ousted Altman last month. At that time, some investors contemplated reducing their stakes to zero. However, after five days of leadership turmoil, Altman was reinstated, and a new board was appointed. The company aims to signal to customers that it is refocusing on its products after the disruptions.
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