OpenAI Seeks Major Funding Boost, Aiming for $100 Billion Valuation

OpenAI is seeking a major capital infusion that could push its valuation beyond $100 billion, according to recent reports.

The company is negotiating with venture capital firms for what would be its largest funding round in over a year.

Thrive Capital is set to invest $1 billion, with Microsoft also expected to contribute. This funding round would follow Microsoft’s $10 billion investment in January 2023, raising its stake in OpenAI to 49%. Overall, Microsoft has invested $13 billion in OpenAI since 2019.

Internal documents suggest that the new investment could value OpenAI at approximately $103 billion. Previously, in February, OpenAI’s shares were privately valued at around $86 billion.

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Despite attracting substantial investments, OpenAI’s financial health is under scrutiny. The company generates about $3.4 billion annually but faces criticism over its long-term profitability.

Concerns have been raised that OpenAI may need significant additional funding to remain viable beyond 2026, with projections indicating potential losses of up to $5 billion in 2024.

Investors are backing OpenAI’s for-profit subsidiary, OpenAI LP, while the organization itself remains a nonprofit. This news comes as competition in the AI industry heats up, with major players like Google, Amazon, and Meta investing heavily in their own AI technologies.

Alexander Stefanov