OpenAI in Talks to Raise More Capital at $100 Billion Valuation

Artificial intelligence market leader OpenAI is reportedly in negotiations with investors for a new funding round that would see the Sam Altman-led company raise billions at a valuation of more than $100 billion. 

According to reporting from The Wall Street Journal, Thrive Capital, the venture capital firm led by Josh Kushner, will spearhead the funding round and invest around $1 billion in OpenAI, which has raised $11.3 billion since its founding in 2015. The company’s primary financial backer, Microsoft, which invested $10 billion in the company in January 2023, is expected to make a follow-on investment. 

OpenAI has been the undisputed leader in the AI space since the November 2022 launch of ChatGPT, but to stay ahead of the competition, it will need to continue training next-generation AI models. That task requires an extreme amount of hardware, energy, and money. As reported by the Journal, OpenAI spent more than $100 million to develop GPT-4, its current flagship model, and its next model is expected to cost even more. 

According to Bloomberg, OpenAI has been in discussions regarding this new fundraising round since at least December 2023. In a memo from OpenAI chief financial officer Sarah Friar obtained by Bloomberg, Friar said that the new funds “will support the need for computing power and other operating expenses.” 

In February, The New York Times reported that OpenAI had completed a separate deal with Thrive Capital that valued the company at around $80 billion. At that time, the company didn’t issue new shares, but instead held a “tender event,” in which employees were given the opportunity to cash out on some of their existing shares. Friar reportedly told employees that another tender event is likely coming later this year.