OpenAI is in talks to raise $6.5 billion (roughly Rs. 54,587 crores) from investors at a valuation of $150 billion (roughly Rs. 12,59,714 crores), according to people familiar with the situation.
The new valuation, a figure that does not include funds raised, is significantly higher than the $86 billion (roughly Rs. 7,22,236 crores) valuation of the company in its tender offer earlier this year, and cements its place as a Is. Most valuable startup in the world.
Additionally, OpenAI is also in talks to raise $5 billion (about Rs 41,990 crore) of debt from banks in the form of a revolving credit facility, said one of the people, who declined to be identified discussing the matter privately. Told not to do it. Information
The startup declined to comment. People familiar with the deal said discussions are still ongoing and terms could change.
Bloomberg previously reported that the funding round will be led by Thrive Capital. Thrive declined to comment on the latest valuation. Microsoft, the company’s biggest investor, is also set to participate, and Apple and Nvidia are also in talks about investments.
OpenAI is not the first major tech startup to turn to Wall Street banks for a revolving credit facility. Many technology companies, including Facebook – now Meta Platform – Alibaba Group Holding, Uber Technologies and DoorDash, have turned to Wall Street for credit lines before pursuing an initial public offering, often to strengthen banking relationships. Historically, companies reward banks that make large loan commitments with roles in their IPOs. In return, lenders sometimes offer better terms on financing.
Founded in 2015, OpenAI has been at the center of the rapid shift towards AI in the technology industry, fueling an investment frenzy with the launch of its easy-to-use chatbot, ChatGPT, in 2022. The company’s products, which can generate realistic images and human-like text from just a few word prompts, have attracted the attention of both consumers and investors.
OpenAI has grown significantly as a company since its founding. Late last year, it briefly ousted its chief executive, Sam Altman. Today, only a few people remain from the original founding team, and the company has taken steps to overhaul its board of directors and add to its executive ranks.
In a memo to employees last month, OpenAI Chief Financial Officer Sarah Fryer said the financing will support the need for computing power and other operating expenses, Bloomberg reported. He also said in the memo that the startup aims to allow employees to sell some of their shares in a tender offer later this year.
© Thomson Reuters 2024
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