OpenAI Fundraising Set to Push Valuation to $150 Billion

OpenAI is reportedly in discussions to raise $6.5 billion in funding at a valuation of $150 billion, according to Bloomberg. This new valuation significantly surpasses the company’s earlier valuation of $86 billion from a tender offer earlier in the year, solidifying OpenAI’s position as one of the most valuable startups globally.

In addition to the equity raise, the company is also negotiating a $5 billion revolving credit facility from banks. While OpenAI has declined to comment on these developments, sources indicate that talks are ongoing and the terms may still change.

The funding round is expected to be led by Thrive Capital, though the firm has not commented on the new valuation. OpenAI’s largest investor, Microsoft, is also expected to participate, with Apple and Nvidia reportedly considering investments as well.

It’s not uncommon for major tech startups to seek revolving credit facilities from Wall Street banks ahead of a public offering. Companies like Meta (formerly Facebook), Alibaba, Uber, and DoorDash have used similar credit lines to build relationships with banks, which can result in better terms for financing and favorable roles during IPOs.

Founded in 2015, OpenAI has become a central player in the tech industry’s shift toward artificial intelligence, particularly after the release of its widely popular ChatGPT in 2022. The company’s AI tools, which can generate realistic images and human-like text with minimal input, have drawn significant attention from both consumers and investors.

The company has undergone significant changes since its inception, including the temporary removal of its CEO, Sam Altman, last year. Only a few of the original team members remain, and OpenAI has since restructured its board and leadership.

The new funding will be used to support the company’s computing infrastructure and other operational costs, according to Chief Financial Officer Sarah Friar. Bloomberg previously reported that Friar informed employees that OpenAI is planning a tender offer, allowing staff to sell shares later this year.