OpenAI, the company behind the widely popular ChatGPT, is reportedly in discussions to secure a staggering $150 billion valuation, according to Bloomberg News. The move would significantly boost its status as one of the largest startups globally and reflect the immense interest and investment in the artificial intelligence sector.
The company is aiming to raise $6.5 billion from investors, alongside another $5 billion in debt through a revolving credit facility with banks, the report indicates. This new valuation would represent a 74% increase over the $86 billion valuation it achieved in a previous tender offer earlier this year.
The funding round, if successful, would not only fortify OpenAI’s position in the tech industry but also allow it to remain privately held for a longer period. The company’s decision to avoid going public highlights the current trend among high-profile startups, which are increasingly opting to stay private due to the high costs and volatility associated with public markets.
OpenAI, under the leadership of Sam Altman and with significant backing from technology giant Microsoft, has played a pivotal role in reigniting Silicon Valley’s interest in AI technologies. The company’s innovations, particularly ChatGPT, have positioned it as a leading player in the AI space.
In a sign of its growing prominence, OpenAI has been included in Forge Global Holdings’ “Private Magnificent Seven,” a list of elite private startups that rivals the market capitalization of major public companies like Microsoft, Apple, Google-parent Alphabet, and Tesla.
As the company seeks this latest round of funding, it reflects a broader trend where venture capitalists are looking for liquidity options outside of initial public offerings (IPOs). Alternatives such as private equity investments and specialized funds like Destiny Tech100 and ARK Venture Fund are increasingly preferred by high-growth startups.
Chelsea Childs, a partner at law firm Ropes & Gray, noted that while venture capitalists appreciate the liquidity of public markets, the current climate favors private funding options. The choice between remaining private or pursuing an IPO remains a critical consideration for investors and high-profile startups alike.
OpenAI did not immediately respond to requests for comment, and Thrive Capital, which Bloomberg News reported might lead the funding round, also declined to provide any statements.
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