OpenAI aims to raise at least $5bn at $150bn valuation

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OpenAI is aiming to raise at least $5bn at a valuation of $150bn from investors including Apple, Nvidia, Microsoft and Thrive Capital, in a deal that could almost double the artificial intelligence start-up’s valuation.

The San Francisco-based group has been in discussions with investors in recent weeks about a new round of financing to fund its ambitious plans to develop AI models capable of outperforming human intelligence and give it an advantage over rivals including Anthropic, Google and Meta.

According to deal terms sent to prospective investors and seen by the Financial Times, the company is targeting a valuation of $150bn, a big jump from the $86bn at which it was valued at the start of this year, and is seeking new funds of at least $5bn. The ultimate raise could exceed $6.5bn, according to one investor pitched on the deal.

Thrive, a venture capital firm founded by Josh Kushner, is leading the round and expected to invest $1bn, according to people with knowledge of the matter.

The total size of the fundraising round could change as prospective backers including Apple, Nvidia and Microsoft — the three most valuable publicly traded companies in the world — discuss the size and nature of their involvement with OpenAI. Microsoft has already committed $13bn to the start-up.

OpenAI and Thrive declined to comment.

The start-up has rapidly expanded since launching its ChatGPT chatbot in 2022, with revenues hitting $2bn on an annual basis at the start of the year, according to people familiar with the matter. But OpenAI remains lossmaking as the costs of developing cutting-edge AI models increases exponentially. It also faces growing competition from rivals.

Last week, OpenAI co-founder Ilya Sutskever announced that his three-month-old start-up had raised $1bn at a $5bn valuation, while start-ups Anthropic and Elon Musk’s xAI have raised billions of dollars in the past year.

A valuation of $150bn would make OpenAI one of the most highly valued start-ups ever, close behind Musk’s rocket venture SpaceX.

The fundraising round comes amid growing concern about a bubble in the space, with AI model makers coming under pressure from investors to generate returns as the exorbitant costs of building and training models mount. A number of smaller competitors, including Character. AI, Adept and Inflection have been absorbed by Big Tech companies in the past year.