OpenAI is reportedly in discussions to raise up to $100 billion in new funding. If completed, the round could value the company at as much as $830 billion.
The Wall Street Journal reported the talks, citing people familiar with the matter. Earlier, The Information also reported on the potential fundraiser.Â
That report suggested a valuation closer to $750 billion. Even at the lower figure, the deal would rank among the largest private funding rounds ever.
Deadline
OpenAI is aiming to finalize the funding by the end of the first calendar quarter next year. The timeline is tight, but the company appears motivated to move quickly.
To secure such a large sum, OpenAI may seek backing from sovereign wealth funds. These investors often support capital-heavy projects with long time horizons.
As a result, they may be well-suited to OpenAI’s global expansion plans.
Commitments and Expansion
The funding effort comes as OpenAI commits to spending trillions of dollars over time.
These commitments include major infrastructure deals around the world to maintain a lead in advanced artificial intelligence.
Running and scaling AI systems has become increasingly expensive. In particular, inferencing costs have grown sharply.
Inferencing refers to using trained models to generate outputs. Unlike training, this work is often paid for with cash rather than cloud credits.
This suggests OpenAI’s compute needs have exceeded what existing partnerships can offset.
Also read: OpenAI Reports Major Enterprise Gains
Faster Releases
Competition in the AI sector continues to grow, and companies such as Anthropic and Google are releasing new models at a rapid pace.
As a result, OpenAI has accelerated its own development cycle. The company has pushed out new models more frequently.
It has also expanded its developer tools and platforms. These moves aim to strengthen OpenAI’s position within the broader AI ecosystem.
Investor Sentiment
At the same time, enthusiasm around AI investing has cooled. Some investors are now questioning whether the current pace of spending is sustainable.
Large technology firms, including Amazon, Microsoft, Oracle, and OpenAI itself, have relied heavily on debt to fund AI investments.
Over time, concerns about long-term returns have increased. In addition, supply chain issues pose new challenges.
Memory chip shortages have constrained chip production. This presents a limitation that threatens to slow progress across the wider technology industry.
IPO Rumors and Amazon Talks Surface
OpenAI has also been rumored to be exploring an initial public offering. An IPO could raise tens of billions of dollars. That capital would help fund ongoing development and infrastructure costs.
Reports suggest OpenAI is currently generating about $20 billion in annual run-rate revenue. This level of revenue supports its high valuation, despite rising expenses.
Separately, there are rumors that OpenAI is courting Amazon for a $10 billion investment.
Such a deal could also provide access to Amazon’s new AI computing chips and ease hardware constraints.
If the funding round proceeds, OpenAI’s cash reserves would grow substantially. According to PitchBook data, the company already holds more than $64 billion.
In its most recent secondary transaction, OpenAI was valued at roughly $500 billion. A successful raise at the reported level would mark a sharp increase in valuation.
