OpenAI reportedly looking to raise $100 billion at $830 billion valuation

OpenAI is in talks to raise up to $100 billion in a funding round that could value the ChatGPT maker as much as $830 billion, the Wall Street Journal reported Thursday, citing anonymous sources.

The company aims to raise funds by the end of the first quarter of next year and may ask sovereign wealth funds to invest in this round, WSJ reported. The Information, which first reported news of the deal, said the funding would give OpenAI a $750 billion price tag.

The funding comes as OpenAI pledges to spend trillions of dollars and close deals around the world to gain an edge in the race to develop AI technology. The cash infusion will also help the company spend on inference, but inference funding appears to be funded more with cash than cloud credits, suggesting that the company’s computing costs have grown beyond what can be subsidized with partnerships or credits.

And with increasing competition from rivals like Anthropic and Google, OpenAI needed to step on the gas to release new models and expand its presence in the developer and tools ecosystem.

Meanwhile, broader sentiment around AI has cooled recently, as investors begin to question whether the pace of debt-fueled investment by giants like Amazon, Microsoft, Oracle, and Open AI itself can be sustained over the long term. It also doesn’t help that a shortage of memory chips is limiting chip production and threatens to impact the broader technology sector.

OpenAI is also rumored to be working on an IPO as a way to raise tens of billions of dollars and fund its development efforts, and is currently said to have annual run-rate revenue of around $20 billion. There are also rumors that the company is seeking a $10 billion investment from Amazon, which would also give the AI ​​Institute access to the tech giant’s new AI computing chips.

If the funding goes through, it would add a significant amount to OpenAI’s coffers, which currently holds more than $64 billion, according to PitchBook data. The company was recently valued at about $500 billion in secondary transactions.

OpenAI did not immediately respond to a request for comment.