Founded in 2015, OpenAI has been at the forefront of the technology industry’s rapid shift towards artificial intelligence, sparking significant investment interest with the launch of its user-friendly chatbot, ChatGPT, in 2022. The company is now negotiating to raise $6.5 billion from investors at a striking valuation of $150 billion, according to sources familiar with the discussions.
Increased Valuation Reflects Growing Impact
This new valuation significantly surpasses the $86 billion figure from the company’s earlier tender offer this year, solidifying OpenAI’s status as one of the world’s most valuable startups. The increased valuation does not include the funds currently being raised.
Additional $5 Billion Debt Financing Discussions
In parallel, OpenAI is in discussions to secure $5 billion in debt financing from banks through a revolving credit facility. Sources involved in the talks, who wished to remain anonymous, indicated that negotiations are ongoing and the terms may still be subject to change.
Key Investors and Funding Details
Thrive Capital is expected to lead the funding round, though the firm declined to comment on the latest valuation. Microsoft Corp., OpenAI’s largest investor, is also set to participate. Additionally, Apple Inc. and Nvidia Corp. are reported to be in talks about investing.
OpenAI is following a trend seen among major tech startups that have turned to Wall Street banks for revolving credit facilities before pursuing initial public offerings. Companies like Meta Platforms Inc., Alibaba Group Holding Ltd., Uber Technologies Inc., and DoorDash Inc. have previously secured credit lines to bolster banking relationships and potentially gain favorable terms for future public offerings.
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Since its inception, OpenAI has undergone significant changes, including a brief leadership shift last year that saw CEO Sam Altman ousted. The company has since overhauled its board and expanded its executive team. According to a recent memo from Chief Financial Officer Sarah Friar, the new financing will help cover computing power needs and other operational costs. Additionally, OpenAI plans to allow employees to sell some of their shares through a tender offer later this year.
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