OpenAI is in talks to raise up to $100 billion in a funding round that could value the ChatGPT maker at up to $830 billion, according to a Thursday report from the Wall Street Journal. The report cites anonymous sources who say the company aims to secure this funding by the end of the first calendar quarter next year and may ask sovereign wealth funds to invest. An earlier report from The Information placed the potential valuation at around $750 billion.
This massive fundraise comes as OpenAI commits to spending trillions of dollars on its global expansion. The company is striking deals and building new data centers worldwide in an effort to stay ahead in the intense race to develop advanced AI technology. The fresh capital would specifically help cover the company’s soaring costs for AI inferencing, which now appear to be funded more by cash than by cloud credits. This suggests OpenAI’s computing expenses have grown beyond what existing partnerships can subsidize.
Competition is heating up from rivals like Anthropic and Google, forcing OpenAI to accelerate its pace. The company is pushing to release new models and expand its presence within the developer and tooling ecosystem. However, broader investor sentiment around AI has recently cooled. Some are beginning to doubt whether the current pace of debt-fueled investment by tech giants, including OpenAI, can be sustained long-term. Further complicating matters, the production of essential AI chips is being constrained by memory chip shortages, a issue that threatens the broader tech sector.
Amid these efforts, OpenAI has also been rumored to be laying the groundwork for a potential IPO as a way to raise tens of billions more. The company’s development efforts are currently said to be generating an annual run-rate revenue of about $20 billion. There are additional rumors that OpenAI is courting Amazon for a separate $10 billion investment, which would grant the AI lab access to Amazon’s new AI computing chips.
If this new funding round is successful, it would substantially boost OpenAI’s coffers. The company currently holds more than $64 billion, according to PitchBook data. OpenAI was most recently valued at approximately $500 billion in a secondary stock transaction. The company did not immediately return a request for comment on the funding reports.