OpenAI is pursuing up to $100 billion in new funding, which could push the company's valuation to as high as $830 billion, according to a report by The Wall Street Journal on Thursday.
The funding round is expected to close as early as the first quarter of next year.
OpenAI's valuation stood at $157 billion as of October 2024, meaning it could expand more than fivefold in just over a year. Market observers expect OpenAI's valuation to reach levels that rival major Big Tech companies.
OpenAI is expected to use the funds for developing next-generation AI models and building hardware infrastructure including data centers and chips to run them. The move is seen as a strategy to maintain its lead over competitors such as Google and Anthropic while accelerating the development of artificial general intelligence (AGI).
OpenAI, which remains privately held, reportedly aims to file for an initial public offering with the U.S. Securities and Exchange Commission in the second half of next year, with a target to go public by 2027. The company has paved the way for fundraising through a public listing after converting from a nonprofit to a public benefit corporation, following an agreement with its largest shareholder Microsoft.
With OpenAI, SpaceX, and Anthropic all expected to prepare for IPOs next year, observers warn these companies could become "black holes" absorbing investment capital in the U.S. market. Some analysts raise concerns about a potential "crowding-out effect," where concentration of funds in a few companies could make it difficult for other industries to raise capital.
