OpenAI is in preliminary talks to raise at least $30 billion at a pre-money valuation, or value before the new investment, of about $1.4 trillion, Bloomberg reported Sept. 29, as the ChatGPT developer seeks financing ahead of a delayed stock market debut.
The proposed round would help fund OpenAI until its initial public offering, which the company has delayed, according to a variety of media outlets including the Financial Times, which CEO Sam Altman attributed to safety risks. Altman told Bloomberg TV Sept. 29 that he didn’t “want to put additional pressure right now” on OpenAI.
The most notable safety incident involved hundreds of OpenAI agents in testing breaking out of a sandbox and attacking Hugging Face, a provider of AI models and data sets recently acquired by NVIDIA. A nonprofit recently sued OpenAI over the incident.
The struggles of containing its models complicates frontier AI models to find sustainable revenue from them, and Altman reportedly wanted the company to have a $1 trillion valuation before going public, according to The New York Times. Competitor Anthropic is reportedly seeking a $2 trillion valuation, according to the Financial Times.
While investors such as Dan Ives remain optimistic about the technology’s economic potential, some are more skeptical. “For the benefit of humanity, the markets should tank hard and prevent the OpenAI and Anthropic IPOs,” Michael Burry, who famously predicted the 2008 subprime mortgage crisis, wrote on X.
OpenAI announced March 31 that it had closed a round with $122 billion in committed capital at an $852 billion post-money valuation. It also expanded its revolving credit facility to about $4.7 billion, undrawn at the close. Committed capital typically arrives in installments, so that figure does not translate to unrestricted cash the company can spend now.
SoftBank, which committed $30 billion of that round in three equal installments, was scheduled to pay the final $10 billion Oct. 1, bringing its cumulative investment to $64.6 billion for a roughly 13% stake, according to the company.
Axios reported Sept. 29 that OpenAI’s annualized revenue, which projects recent sales over a full year, was approaching $70 billion.
Compute contracts shape the choices
In its March announcement, the company described a broader mix of cloud providers and chip platforms intended to meet demand and maintain flexibility. Its cloud partners included Microsoft, Oracle, Amazon Web Services, CoreWeave and Google Cloud. It also listed hardware from Nvidia, AMD and others, alongside a chip being developed with Broadcom.
While OpenAI has not published its computing contracts, it has disclosed the size of several deals, including a $300 billion agreement with Oracle. Anthropic’s recent IPO filing shows how binding such deals can be. The Claude developer raised $65 billion in May at a $965 billion post-money valuation. It now expects to spend at least $518 billion over a decade on infrastructure with six partners, according to a confidential IPO prospectus reviewed by Reuters. About 80% of that amount is noncancelable or payable regardless of usage.
Reuters reported that Anthropic must pay Google and Amazon for shortfalls against agreed spending, while arrangements for up to $84.5 billion in computing capacity from xAI, now part of SpaceX, are largely cancelable with 90 days’ notice.
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