OpenAI's Valuation Expected to Surpass $100 Billion in New Funding, Yet to be Finalized

According to The Wall Street Journal, OpenAI, a leader in the artificial intelligence industry, is seeking a new round of funding that could amount to several billion dollars. Venture capital firm Thrive Capital is expected to lead this round with an investment of about $1 billion, and Microsoft is anticipated to continue its support with additional investments.

OpenAI’s last funding round was in January 2023, with Microsoft providing approximately $10 billion. In the time since, the AI industry has seen a rapid rise in new companies, making the competition increasingly fierce.

For OpenAI, continuous funding is crucial for purchasing hardware and investing in technology. Without further financing, it risks being outpaced by competitors, especially since the revenue from ChatGPT Plus subscriptions is not yet sufficient to cover OpenAI's expenses.

Reports suggest that OpenAI's annual revenue this year is expected to reach $3.4 billion. However, further financing is needed to develop the next-generation GPT model, GPT-5, which is anticipated to have higher development costs.

Additionally, documents seen by The Wall Street Journal indicate that one or more current OpenAI shareholders are negotiating to sell their stakes at a valuation of 103 billion. If this deal goes through, OpenAI's valuation would increase from 86 billion in 2023 to over $100 billion.

Microsoft's relationship with OpenAI is complex; while they are competitors, Microsoft is also OpenAI's largest shareholder and relies on the latest GPT models to power services like Copilot.

Therefore, The Wall Street Journal expects Microsoft to continue investing in this funding round, providing OpenAI with more financial support to ensure both OpenAI and Microsoft can outperform their competitors in the ongoing race.