Endorsing AI Trading! OpenAI is finalizing a new funding round: raising up to $100 billion at a $830 billion valuation

OpenAI is finalizing a new funding round, which could raise $100 billion. After the funding is completed, the company’s valuation will reach $830 billion.

According to The Information, citing sources familiar with the matter, SoftBank is expected to lead this round with an investment of $30 billion, to be disbursed in three installments of $10 billion each within the year. Amazon, which provides cloud services to OpenAI, may invest up to $50 billion. Nvidia, the supplier of OpenAI’s model chips, could contribute up to $30 billion. Long-term partner Microsoft may invest around several billion dollars.

These investments are expected to help the company achieve its $100 billion fundraising goal. This means that additional investments from venture capital funds and other financial institutions could push the total amount raised in this round beyond that figure. However, according to The Information, citing another insider, it is still unclear whether strategic investors will commit additional funds, as negotiations are ongoing.

Sources familiar with the matter told The Information that after securing initial investment commitments, OpenAI is also seeking support from financial investors. One insider stated that OpenAI executives have been in discussions with existing investors Thrive Capital, Khosla Ventures, Founders Fund, Sequoia Capital, and others regarding this funding round. It is not yet clear whether these investors will make additional investments or how much they will invest.

Two insiders also revealed that investors participating in OpenAI’s latest funding round, referred to by OpenAI as a “Series C,” will receive preferred shares, which will convert into Class A common stock upon company exit (such as an IPO). They also indicated that investors will obtain a 1x liquidation preference, a typical term designed to ensure investors recover their full investment upon sale of the company.

First funding after restructuring paves the way for IPO

This funding round is OpenAI’s first since the company’s corporate restructuring last fall. The reform allowed the company to issue standard equity, a key step toward its IPO. According to a media report citing an insider, company executives have discussed going public as early as the fourth quarter.

Prior to this round, OpenAI had raised approximately $61 billion from investors including Microsoft, Thrive, and SoftBank. Last fall, the company sold shares held by employees and other shareholders at a valuation of $500 billion.

Massive funding to cope with astronomical expenses

OpenAI’s large-scale fundraising is driven by expectations of soaring costs for AI operations and training. According to insiders cited by the media, the company predicted last summer that between 2025 and 2030, the costs for running and training AI systems, as well as supporting infrastructure such as backup servers, would reach approximately $450 billion.

The $830 billion valuation in this round represents a significant jump from last fall’s $500 billion, reflecting continued enthusiasm from major investors for AI pioneers despite the company’s substantial expenditure pressures. The smooth progress of this funding provides ample financial backing for OpenAI’s technological development and infrastructure expansion.

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