Speculation arises as OpenAI looks to raise more funds at a $100+ valuation
OpenAI is reportedly seeking a funding round at a $100 billion valuation, led by Thrive Capital, with potential participation from NVIDIA and Apple, to address its significant cash needs amid high operational costs and strong investor interest in the generative AI sector.
As reported by the WSJ, OpenAI is looking to close a funding round at a $100 valuation, where previous investor Thrive Capital is expected to lead the round with an amount close to $1 billion. Although expected, it is still unclear whether Microsoft, which already owns 49% of OpenAI will participate in the funding round. It is also unknown whether other previous investors in the startup are interested in joining. Rather, further reports claim that NVIDIA and Apple plan to participate in the round if it takes place.
It is well-known that OpenAI needs the cash, as the available data points to the startup's annualized revenue being around $3.5 billion, and the costs associated with AI training, server capacity rentals and staffing are estimated at $8.5 billion, resulting in a potential $5 billion deficit. Fortunately for OpenAI, the secondaries market seems to be bursting with investors trying to get themselves on the startup's cap table, consequently backing the estimated $100+ billion valuation. It is clear that prices are partially driven by the current excitement and buzz surrounding not only OpenAI, but generative AI more generally. Indeed, it would not be surprising that the current interest in OpenAI also boosted the valuations of other well-established AI startups, such as Anthropic, Cohere, and Hugging Face.
