OpenAI is expected to reach a valuation of $80 to $90 billion in a financing round

Ten billion dollars from Microsoft, another $300 million from Tiger Global, Sequoia Capital, and Andreessen Horowitz in May 2023 – and now OpenAI is looking for money again. Although the company is still the market leader in LLMs and AI chatbots à la ChatGPT, the competition never sleeps and the iron needs to be struck while it is hot. That’s why new rumors are now circulating through Silicon Valley that OpenAi is fundraising around CEO Sam Altman.

According to the Wall Street Journal, OpenAI is currently valued at between $80 and $90 billion. That’s roughly three times what it was in the last round of financing when investors paid a valuation of $27 to $29 billion. How much money OpenAI wants to raise is unknown or is still the subject of negotiations. It has so far been leaked that the company behind GPT-3 and GPT-4 is expected to have sales of a billion dollars this year. However, operating AI solutions costs an incredible amount of money, and regulatory and personnel challenges also require a lot of cash.

Recently, OpenAI’s competitors, some of which were founded by former employees, raised a lot of capital as well. Anthropic, founded by former OpenAI employees Daniela Amodei and Dario Amodei, has been promised up to $4 billion by Amazon, in return for which the AI ​​startup with the chatbot Claude will be the preferred Amazon cloud partner. At the same time, Google is pushing forward PaLM, Bard, and Gemini to provide an equal or even better technology to GPT-4 from OpenAI. This is also why OpenAI delivers new updates for ChatGPT almost every week in order to stay in the conversation.

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OpenAI already has Microsoft as a major investor

Other challenges for OpenAI that demand money: Above all, Meta Platforms is strongly pushing open source AI, which is increasingly seen as an alternative to proprietary solutions like those from OpenAI. In the EU, the AI ​​Act will also heavily regulate what foundation models such as GPT-4 are allowed to do or what they can be used for. An increased presence in the EU will be required if OpenAI wants to remain successful in the European markets.

The company’s cap table is also exciting regarding the financing round. Microsoft reportedly holds 49 percent of the ChatGPT maker – so the question is which new investors will come into question. Google and Amazon will probably be out of the question as big donors. Recently we saw that Salesforce, Nvidia, Oracle, and Deutsche Telekom also became active as institutional investors.

The largest AI financing rounds in 2023: