OpenAI is reportedly trying to raise $100B at an $830B valuation

OpenAI is in talks to raise up to $100 billion in a funding round that could value the ChatGPT maker at up to $830 billion, the Wall Street Journal reported Thursday, citing anonymous sources.

The company is aiming to raise the funding by the end of the calendar first quarter next year, and it may ask sovereign wealth funds to invest in the round, the WSJ reported. The Information first reported news of the deal, though it said the fundraise would land OpenAI a $750 billion price tag.

The funding would come as OpenAI commits to spend trillions of dollars and strikes deals around the world as the company tries to stay ahead in the race to develop AI technology. The cash injection would also help the company with its spending on inferencing, which seems to be funded more by cash than cloud credits, suggesting the company’s compute costs have grown beyond what partnerships and credits can subsidize.

And, as competition intensifies from rivals like Anthropic and Google, OpenAI has had to step on the gas to release new models and expand its presence in the developer and tooling ecosystem.

Meanwhile, broader sentiment around AI has recently cooled as investors start doubting whether the pace of debt-fueled investment by giants like Amazon, Microsoft, Oracle, and OpenAI itself can be maintained in the long run. It also doesn’t help that the production of chips is being constrained by shortages in the supply of memory chips, which threatens to affect the broader tech sector.

OpenAI has also been rumored to be working on an IPO as a way to raise tens of billions and fund its development efforts, which are currently said to be generating annual run-rate revenue of about $20 billion. There are also rumors that the company is courting Amazon for a $10 billion investment that would also give the AI lab access to the tech giant’s new AI computing chips.

If the fundraise happens, it would add a substantial amount to OpenAI’s coffers, which currently have more than $64 billion, according to PitchBook data. The company was most recently valued at about $500 billion in a secondary transaction.

OpenAI did not immediately return a request for comment.