OpenAI is close to finalizing a funding round of more than $100 billion at a valuation that could exceed $850 billion, according to Bloomberg, as the company continues to spend heavily while moving toward profitability and tests new ways to generate revenue.
Deal Size And Valuation Details
Bloomberg reported, citing sources familiar with the matter, that the financing would value the ChatGPT maker higher than previously expected. Investors are now placing the company about $20 billion above the earlier $830 billion target valuation. The sources said OpenAI’s pre-money valuation would remain at $730 billion.
The size of the round reflects expectations that the company will continue to require large amounts of capital as it expands its products and infrastructure.
Cash Burn And Revenue Experiments
The talks come as OpenAI continues to use significant amounts of cash while working toward profitability. As part of that effort, the company has begun testing advertisements in ChatGPT for free users. The move is intended to bring in more revenue, though it also carries the risk of pushing some users away from the service.
The timing of the fundraising suggests investors are willing to accept that tradeoff while backing the company at a higher valuation.
Early Backers In The Round
The first portions of the funding are expected to come from several large technology companies and investors already linked to OpenAI. Bloomberg reported that Amazon is in talks to invest up to $50 billion, SoftBank is preparing a $30 billion investment, and Nvidia is close to committing about $20 billion. Microsoft is also expected to participate in the round.
More Investors Expected Later
Venture capital firms and sovereign wealth funds are expected to join in later stages of the financing. Their participation could increase the total amount raised beyond the initial figure reported by Bloomberg’s sources.
The structure of the round suggests the company is spreading the fundraising across multiple groups of investors rather than relying on a single backer.
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