The Wall Street Journal reported this week, citing sources, that OpenAI is in discussions to raise new funding that could value the company at more than $100 billion.
Investors have already proven they are willing to value a company so highly to get on OpenAI’s coveted capital table. Several companies that track or facilitate secondary deals (where investors buy stock from existing investors rather than directly from the company) have seen investors pay prices that represent a valuation of $100 billion or more.
The main deal OpenAI is negotiating is said to be led by Josh Kushner’s Thrive Capital, which is expected to invest $1 billion, according to the Journal, and Microsoft, Nvidia, and Apple are also rumored to be investors. This would be a significant step forward for the AI leader. The company was most recently valued at $86 billion in a secondary sale in September that included existing stakes, according to Bloomberg.
Still, brokerage Rainmaker Securities has seen investors bid up to $143 billion for OpenAI shares, while secondary data tracking platform Caplight estimates the company is now worth more than $111 billion based on secondary deal activity and past traditional funding rounds.
“There are a lot of investors out there who want to be part of this story and be an investor in this company,” Glen Anderson, co-founder and managing partner at Rainmaker Securities, told TechCrunch. “So is $100 billion a lot of money? Maybe. But if OpenAI can live up to its potential, it could be a bargain.”
Greg Martin, co-founder and managing director of Rainmaker Securities, added that while the company’s valuation has risen rapidly, so has its revenue. OpenAI is still burning a ton of cash, he said, but it’s notable that the company has grown from $0 in revenue just a few years ago to billions today. The company is expected to reach $2 billion in ARR by the end of the year, according to The Information.
“It’s hard to put a proper value on OpenAI, but we’re seeing a lot of demand,” Martin said. “They’re afraid of missing out on the premium the company is getting. There’s a compelling argument that one day the company could be worth $1 trillion.”
OpenAI’s next official valuation has not yet been determined, but one thing is certain: this funding round will spur more secondary deal activity for OpenAI and other AI contenders. He also predicts that valuations for companies like Anthropic, Cohere, and Hugging Face will rise.
“It creates buzz. It creates excitement. It resets market expectations,” Martin said.
