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OpenAI, the maker of the viral chatbot ChatGPT, is in preliminary talks for a new funding round that would value the artificial intelligence company at $100 billion or more. This potential mega round would cement OpenAI as one of the world’s most valuable private startups.
According to sources familiar with the matter, investors are involved in initial discussions about the financing round, although key details such as valuation, terms and timing are still fluid and subject to change.
If the round closes at around $100 billion, OpenAI would become the second-highest valued startup in the US behind SpaceX, Elon Musk’s rocket company, according to data from CBInsights.
OpenAI declined to comment on the funding discussions.
This new round would follow a separate OpenAI tender bid that is expected to close in early January. That tender valued the company at $86 billion and saw strong investor demand outweigh availability, as previously reported.
OpenAI’s rapid valuation trajectory reflects the AI frenzy that emerged last year after the launch of ChatGPT, an eerily human-like chatbot. Within months, OpenAI shook Silicon Valley as its valuation soared thanks to $13 billion in funding, mostly from Microsoft.
The AI capabilities demonstrated by ChatGPT have reset expectations around artificial intelligence, creating intense competition among tech giants to capitalize on this new landscape.
After previously downplaying AI’s potential, companies like Amazon and Alphabet poured billions into OpenAI rival Anthropic. Salesforce led a $4.5 billion investment in AI startup Hugging Face, while Nvidia revealed it made two dozen AI startup investments in 2023.
In addition to the latest funding round, OpenAI is also reportedly in talks to launch a new chip startup with Abu Dhabi’s G42, aimed at competing with Nvidia’s dominance in AI chips.
Discussions centered around the G42 contribution of $8 to $10 billion in capital for ‘Project Tigris’, although it is unclear whether this is related to the broader OpenAI funding round.
OpenAI’s ambitions to design custom artificial intelligence chips reflect its rapidly evolving priorities and growth. However, the company also faced leadership turmoil last month when the board abruptly fired CEO Sam Altman, only to reinstate him with a new board five days later.
While the drama temporarily shook investor confidence, OpenAI seems eager to signal that it is back on track, focused on product development and commercialization.
As innovations like ChatGPT disrupt the technology landscape, OpenAI continues to aggressively pursue its mission of developing secure and useful artificial general intelligence (AGI). If completed, this latest $100 billion funding round will cement OpenAI’s place among an elite group of only the highest valued startups in the world.