OpenAI fundraising will boost startup’s valuation to $150 billion
According to sources familiar with the matter, OpenAI is in talks to raise $6.5 billion (approximately Rs 54,587 crore) from investors, at a valuation of $150 billion (approximately Rs 12,59,714 crore).
The new valuation, which does not include the money raised, is significantly higher than the $86 billion (approximately Rs 7,222.36 crore) valuation in the company’s public offering earlier this year and cements the company’s position as one of the most valuable startups in the world.
At the same time, OpenAI is also in talks to raise $5 billion (about Rs 41,990 crore) in debt from banks in the form of a revolving credit facility, one of the people said, declining to be named as they did not want to discuss private information.
The startup declined to comment, but people familiar with the deal noted that talks are ongoing and terms could change.
The funding round will be led by Thrive Capital, Bloomberg previously reported. Thrive declined to comment on the latest valuation. Microsoft, the company’s largest investor, will also participate, and Apple and Nvidia are in investment talks.
OpenAI isn’t the first big tech startup to turn to Wall Street banks for a revolving credit facility. A slew of tech companies, including Facebook — now Meta Platforms — Alibaba Group Holding, Uber Technologies and DoorDash, have tapped Wall Street for credit lines before pursuing IPOs, often in part to shore up banking relationships. Historically, companies have rewarded banks that make large credit commitments with roles in their IPOs. In return, lenders sometimes offer better terms for the financing.
Founded in 2015, OpenAI has been at the center of the tech industry’s rapid shift toward AI, sparking an investment frenzy with the 2022 launch of its user-friendly chatbot, ChatGPT. The company’s products, which can generate realistic images and human-sounding text with just a few words, have attracted the attention of consumers and investors alike.
OpenAI has evolved significantly as a company since its founding. Late last year, Chief Executive Officer Sam Altman was briefly fired. Today, only a handful of the original founding team remain, and the company has taken steps to reshape its board of directors and expand its executive team.
In a memo to employees last month, OpenAI Chief Financial Officer Sarah Friar said the funding will cover computing power needs and other operational costs, according to Bloomberg reportedShe also said in the memo that the startup aims to have employees sell some of their shares in a public offering later this year.
© Thomson Reuters 2024
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
