Momentum is coming! OpenAI plans to launch a new round of financing at a valuation of US$100 billion

If this funding round goes as planned, Open AI will become the second most valuable startup in the United States. ‍‍‍‍

Written by: South China Morning Post

Compiled by: MetaverseHub

Microsoft-backed OpenAI is in early discussions for a new round of financing that would value it at or above $100 billion, according to people familiar with the matter.

Investors who may participate in this round of financing have been included in preliminary discussions, people familiar with the matter said. However, these people asked not to be named due to some privacy concerns. In addition, details such as the terms, valuation and timing of this financing round have not yet been finalized, and some changes are still possible.

According to data from CB Insights, if this round of financing goes as planned, Open AI will become the second most valuable startup in the United States, second only to Musk’s Space Exploration Technology Company (SpaceX).

Open AI will complete a separate tender offer in early January, allowing employees to sell shares at a valuation of $86 billion, Bloomberg previously reported. People familiar with the matter said the tender offer was led by Thrive Capital and that investor demand was greater than supply.

A year ago, OpenAI released a chatbot ChatGPT, which can write “human-like” sentences and even poetry based on simple prompts. *OpenAI’s rapidly growing valuation reflects the artificial intelligence craze set off by the company *.

Currently, Open AI has become the hottest startup in Silicon Valley, having raised more than $13 billion from Microsoft so far. inspiring a new awareness of the promise of artificial intelligence and changing the landscape of the tech industry in just a few months.

Since then, Amazon.com Inc. and Google parent Alphabet Inc. have invested billions of dollars in OpenAI rival Anthropic.

Salesforce led an investment in Hugging Face, valuing it at $4.5 billion. Nvidia, a company that designs semiconductors for artificial intelligence tasks, said earlier this month that it had made more than 20 investments in 2023.

According to people familiar with the matter, OpenAI has also held funding discussions with G42, a company headquartered in Abu Dhabi, United Arab Emirates, regarding a new chip initiative.

In addition, people familiar with the matter also said that Open AI has discussed plans to raise US$8 billion to US$10 billion from G42. The person spoke on condition of anonymity because the information was confidential.

It’s unclear whether OpenAI’s semiconductor venture capital investment is related to the company’s broader financing.

Bloomberg reported last month that OpenAI CEO Altman has been seeking funding for a chip manufacturing project codenamed “Tigris.” “Tigris” aims to produce semiconductors that can compete with Nvidia, which currently dominates the artificial intelligence chip market.

In October this year, G42 announced a partnership with OpenAI, committed to "providing cutting-edge artificial intelligence solutions to the UAE and regional markets", but did not disclose the financial details of the specific cooperation.

The G42 was established in 2018 and is led by Sheikh Tahnoon bin Zayed Al Nahyan, UAE National Security Advisor and Chairman of the Abu Dhabi Investment Authority.

In early November, OpenAI’s board of directors suddenly fired Altman. At that time, OpenAI’s future seemed uncertain, and some investors even considered reducing their holdings to zero.

But after five days of leadership turmoil, Altman was recalled and a new board appointed.

Open AI’s move is intended to signal to customers that it will refocus on its products after experiencing turmoil.