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OpenAI is in talks to raise multi-billion dollars at a valuation of more than $100 billion as the maker of ChatGPT looks to capitalize on its early lead in the booming artificial intelligence sector.
The San Francisco-based company is currently in talks with venture capital firms including Thrive Capital, which plans to invest $1 billion and lead the round, as well as other investors, two people familiar with the situation said.
Terms of the new financing are not yet final, the people added, but the deal is expected to raise billions of dollars and value the company at more than $100 billion, a significant increase from OpenAI’s current valuation of $86 billion.
According to one of the company’s investors, OpenAI shares recently traded on the secondary market at a price that represents a valuation of over $110 billion.
A valuation at that level in the new round “would make more sense, but a process like this, where fear of missing out (FOMO) sets in, could be higher,” he said.
OpenAI last raised new capital in early 2023, shortly after the release of its flagship chatbot ChatGPT, when Microsoft committed $10 billion to the company in a funding round that valued the startup at around $30 billion.
It is unclear whether Microsoft will participate in the company’s latest funding round.
Josh Kushner’s Thrive has become one of OpenAI’s most prominent backers, buying up employee stock last year, valuing OpenAI at $86 billion.
OpenAI founder Sam Altman’s recent post on social media site X states: “I’ve been fortunate to work with many great investors. There is no one I would highly recommend than Josh.”
OpenAI and Thrive declined to comment. Microsoft did not immediately respond to a request for comment.
OpenAI’s valuation has skyrocketed thanks to rapid advances in generative AI and growing expectations that the technology will transform different sectors of the economy.
Nvidia, whose chips have driven advances in artificial intelligence, said Wednesday that it more than doubled its revenue last year, to $30 billion for the three months through July.
OpenAI’s revenue has also skyrocketed, reaching $2 billion on an annualized basis earlier this year.
However, there are also growing concerns about how startups can make a profit with AI models that cost hundreds of millions of dollars to train and run.
OpenAI also faces increasingly tough competition from rivals such as Anthropic, Google and Elon Musk’s xAI, which recently raised $6 billion to close the gap with ChatGPT.
New investments would give OpenAI more firepower to build its long-awaited new model GPT-5 and compete with rivals.
The Wall Street Journal first reported that OpenAI was in talks with investors to raise new capital.
Additional reporting by Cristina Criddle in San Francisco
