OpenAI nears $150B valuation, raising $6.5B led by Thrive Capital with a $1B investment. Microsoft and Nvidia are also in talks.
Nvidia, Apple, and Microsoft strategically align with OpenAI, pushing AI integration in hardware and consumer tech.
OpenAI seeks $6.5B to scale infrastructure, following $8.5B in operational costs for AI development.
OpenAI is reportedly close to securing $6.5 billion in its next round of investor funding. Additionally, the new round is expected to bring the firm to a stunning valuation of $150 billion. The social platform's regular backer, Thrive Capital, which also invested in previous rounds, will lead this round with $1 billion. Besides, significant players like Microsoft, Nvidia, and Apple have been said to be in discussion with the firm.
Thrive Capital to Lead $6.5B Funding
Thrive Capital, an active investor previously invested in OpenAI, will lead this $6.5 billion funding round. This shows that the firm fully believes in OpenAI ‘s growth, as demonstrated by a $1 billion investment from the firm.
In addition to Thrive Capital, Microsoft should continue to provide funds for OpenAI. Microsoft, which invested 10 billion USD in the company, considers further partnerships important for future AI projects.
Other technology industries, like Nvidia and Apple, are also discussing joining this funding round. Nvidia provides hardware centric AI solutions, AI models, and specific GPUs that add value to OpenAI as it develops its infrastructure.
Strategic Interest from Microsoft, Nvidia, and Apple
Microsoft, Nvidia, and Apple invested in this round, thus showing their keen interest in OpenAI’s artificial intelligence advancement. Microsoft has been a partner and a source of funding for OpenAI, and Microsoft is expected to remain so as the company develops.
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Microsoft benefits from OpenAI’s sponsorship, which equally benefits OpenAI due to a good relationship between both companies in advancing AI. Microsoft incorporates ChatGPT and other AI in its products.
Nvidia chips are used widely in AI, so the partnership benefits both Nvidia and OpenAI. However, the interest in Apple also points to a more significant emerging trend of integrating AI functionality into consumer goods.
OpenAI's Rising Costs and Debt Financing
Apart from equity funding, OpenAI is also discussing terms for a $6.5 billion debt financing. The company is currently developing a revolving credit facility agreement with several banks, offering more flexibility in its funding.
As the demand for OpenAI's services increases, the cost of operation has also increased in aspects such as infrastructure, training of AI models, and human resources, among others.
Thus, OpenAI has already invested an estimated $8. 5 billion in these efforts, stressing that more money is needed to maintain the pace of development in a very competitive field of AI. This is important for OpenAI because debt financing will enable it to have the necessary financial stability to keep on improving its AI models' performance while at the same time growing its infrastructure.
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