OpenAI in fund-raising talks that could value company at $195.7 billion

NEW YORK - OpenAI is in talks to raise about US$6.5 billion (S$8.5 billion) as part of a deal that would value the company in the range of US$150 billion, or S$195.7 billion.

This is a nearly US$70 billion increase from its valuation nine months ago, according to five people with knowledge of the conversations.

The deal would make the company more valuable than any other private company, with the exception of ByteDance, maker of video-sharing app TikTok.

As recently as end August, OpenAI was looking to raise about US$1 billion at a US$100 billion valuation.

The new funding round would be led by investment firm Thrive Capital, which has previously invested in OpenAI. Tech giants Apple, Nvidia and Microsoft have also been part of the discussions, said the people, who spoke on condition of anonymity because of the nature of the discussions.

Bloomberg reported earlier on the new valuation talks.

In late 2022, OpenAI started the artificial intelligence (AI) boom with the release of its online chatbot ChatGPT, inciting a global surge in funding for start-ups that built similar technology. Interest in such companies dropped this summer as a series of prominent companies all but disappeared into wealthier and more powerful AI companies like Google, Microsoft and Amazon.

OpenAI has also struggled to repair its reputation after

four board members unexpectedly fired chief executive officer Sam Altman in late 2023.

Since his reinstatement five days after he was forced out, the company has lost several high-profile employees, including its chief scientist and co-founder Ilya Sutskever.

In that same period, the company, which has more than 1,700 employees, has added over 1,000 new workers and released increasingly powerful versions of ChatGPT and similar technologies, including systems that generate images and videos.

Mr Altman, who is admired by peers in Silicon Valley for his fund-raising ability, has strategically built investor enthusiasm for opportunities to purchase stakes in OpenAI. His strategy has been to sell existing shares in a so-called tender offer once a year, which benefits the company’s employees, while later complementing that with a traditional funding round to support OpenAI’s business, a person familiar with Mr Altman’s approach said.

In 2023, as he wrapped up a tender offer that valued the company at more than US$80 billion, Mr Altman was already telling investors that he planned to raise money to value it at US$100 billion. NYTIMES