OpenAI prepares for another funding round amid bankruptcy concerns
OpenAI is reportedly in talks for a new round of funding following reports that it could be on the brink of bankruptcy within the next 12 months. Last month, sources indicated that the AI pioneer might face $5 billion in losses, despite generating approximately $3.5 billion in revenue and having discounted access to Microsoft's Azure services.
According to a CNBC report, the upcoming funding round could push OpenAI’s market valuation beyond $100 billion, a significant leap from its $29 billion valuation in 2023 and $80 billion earlier this year.
The AI startup has enjoyed a crazy rise since the launch of ChatGPT and its other AI offerings, DALL-E and Sora. It’s arguably the best-funded machine learning company and the need for additional capital is evidence of the substantial costs associated with developing and maintaining cutting-edge AI models.
Potential investors
Microsoft has been named as one of the potential investors in the new round although the extent of its investment remains unclear. That would help to dispel the allegations that the relationship between the two companies is complicated, particularly after Microsoft listed OpenAI as a competitor.
Apple and NVIDIA are also rumored to be considering investments in OpenAI. Both companies already have ties with the AI startup, with Apple leveraging OpenAI's technology to power its Apple Intelligence service and NVIDIA providing the GPUs needed to train and run AI models.
The interest from these tech giants underscores the high stakes in the ongoing AI arms race, where companies are vying for dominance in the rapidly expanding field. OpenAI's ability to attract such heavyweight investors, despite its financial struggles, highlights its strategic importance in the AI ecosystem.
As OpenAI prepares for this critical funding round, its fast-rising market valuation could position it as a contender for the title of the world's most valuable company, competing directly with its own partners. However, the exact amounts that Apple and NVIDIA plan to invest in OpenAI remain undisclosed, and the situation continues to evolve.
