OpenAI in talks to raise fresh funds at a valuation of more than $100bn

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OpenAI is in talks to raise billions of dollars at a valuation of more than $100bn, as the ChatGPT maker looks to capitalise on its early lead in the booming artificial intelligence sector.

The San Francisco-based company is talking to venture capital firms including Thrive Capital, which is set to invest $1bn and lead the round, as well as other investors, according to two people with knowledge of the situation.

Terms for the new financing have not been finalised, added the people, but the deal is expected to raise billions of dollars and value the company at more than $100bn, a significant step up from OpenAI’s current $86bn valuation.

According to one investor in the company, OpenAI stock has recently traded on the secondary market at a price that implies a valuation of more than $110bn.

A valuation at that level in the new round “would make more sense but a process like this FOMO [fear of missing out] kicks in and it 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 $10bn to the company in a funding round that valued the start-up at roughly $30bn.

It is not clear whether Microsoft will participate in the company’s latest funding round.

Josh Kushner’s Thrive has become one of OpenAI’s most prominent backers. The firm bought up employee stock last year in a deal that valued OpenAI at $86bn.

OpenAI founder Sam Altman’s most recent post on social media site X reads: “i have been fortunate to work with many great investors; there is no one i’d recommend more highly than josh.”

OpenAI and Thrive declined to comment. Microsoft did not immediately respond to a request for comment.

OpenAI’s valuation has rocketed higher thanks to rapid advances in generative AI, and growing expectations that the technology will reshape various parts of the economy.

Nvidia, whose chips have propelled AI advances, announced on Wednesday that it had more than doubled its revenue over the past year, to $30bn for the three months through July.

OpenAI’s revenues have also surged, reaching $2bn on an annualised basis at the start of this year.

But there are also growing concerns about how start-ups can generate a profit from AI models that cost hundreds of millions of dollars to train and run.

OpenAI is also facing increasingly fierce competition from rivals including Anthropic, Google and Elon Musk’s xAI, which recently raised $6bn in a bid to close the gap to ChatGPT.

New investment would give OpenAI more firepower to build its long-awaited new model, GPT-5, and compete with rivals.

The Wall Street Journal first reported OpenAI was in talks with investors to raise new money.

Additional reporting by Cristina Criddle in San Francisco