Raising up to $100 billion, with a valuation potentially reaching $830 billion, expected to be completed as early as Q1 next year! More reports reveal the latest financing details of OpenAI

OpenAI is planning to raise up to $100 billion in a new round of financing to support its ambitious growth plans.

According to sources cited by The Wall Street Journal on the 19th, this round of financing is currently in its early stages. If OpenAI successfully raises the full target amount, its company valuation could reach $830 billion. The startup plans to complete this round of financing as early as the end of the first quarter of next year, although the terms of the deal may still change.

It remains unclear whether there is sufficient investor demand to meet this target. This financing will be one of the biggest tests for OpenAI as it faces a decline in enthusiasm for artificial intelligence spending in the public market. Despite concerns about an AI bubble putting pressure on many related tech stocks, OpenAI still needs to actively seek substantial capital to remain competitive.

OpenAI CEO Sam Altman has previously been seeking investors globally to build a capital pool, and The Wall Street Journal has reported that the company is weighing a potential initial public offering (IPO). To build its AI models in a rapidly changing market, OpenAI requires extremely ample financial support.

Massive Investment and Strategic Layout

Behind this large-scale financing plan, SoftBank Group has agreed to invest $30 billion in OpenAI. To fund this bet, SoftBank sold $5.8 billion worth of Nvidia shares last month. OpenAI is expected to receive the remaining $22.5 billion of planned financing from SoftBank by the end of this year.

Additionally, OpenAI has sparked a wave of deals at the end of the year, including a content licensing agreement and a $1 billion investment from Disney. Media reports citing informed sources indicate that given the scale of the financing, OpenAI is expected to recruit sovereign wealth funds to participate in the investment, having previously received funding support from the UAE's investment company MGX. These deals indicate that even amid questions about the sources of funding for its expansion plans, OpenAI's financing machine remains strong.

Market Headwinds and Valuation Challenges

OpenAI's potential valuation of up to $830 billion depends on its ability to raise the full target amount. However, the market environment has become more severe. Recently, OpenAI's partners, including Oracle and CoreWeave, have seen declines in their market values. This is primarily due to shareholders' dissatisfaction with the grand plans for data center construction, which seem to face financing headwinds.

For OpenAI, the multi-billion dollar valuation it has achieved through computational deals is also facing skepticism from the outside. As excitement in the public market for AI concepts wanes, investors are becoming more cautious about capital expenditures in this field.

Intense Competition and Cash Burn

In addition to financing pressures, OpenAI is also facing intense market competition. The company has issued a "code red" to counter the growing threat from Google. Unlike OpenAI, Google has low levels of debt and strong profits, allowing it to invest more easily in the field of artificial intelligence In order to maintain this high-intensity competitive situation, OpenAI faces enormous cash consumption. It is estimated that the company will consume over $200 billion in cash by 2030. The Information previously reported details related to OpenAI's latest fundraising efforts, further confirming the company's urgent need for massive capital