OpenAI valuation soars past $150 billion with Tiger Global set to join new funding round

Yesterday, we featured OpenAI following reports that the maker of ChatGPT was in talks to secure new funding at a valuation of $150 billion, a significant leap from its previous $86 billion. Fresh details are now emerging on OpenAI’s ambitious funding round, with news that investment giant Tiger Global wants a piece of the action.

According to a new report from CNBC, Tiger Global is preparing to participate in OpenAI’s much-anticipated funding round that “values the artificial intelligence startup at more than $150 billion.”

Citing sources familiar with the matter, CNBC reported that Thrive Capital is leading this round and is planning a $1 billion investment. Microsoft, Nvidia, and Apple are also reportedly in discussions to join. Tiger Global’s participation was first reported by The Information.

“Venture capital firm Tiger Global Management plans to participate in the multi-billion dollar round, according to people familiar with the matter. Tiger would join Thrive Capital, Microsoft, Nvidia, Apple and the Abu Dhabi AI investment firm MGX, as well as Khosla Ventures which are also in talks to participate in the multi-billion dollar round,” The Information reported.

OpenAI’s valuation earlier this year stood at around $80 billion, a sharp increase from $29 billion the year before. The company’s annual revenue reportedly hit $2 billion earlier this year.

OpenAI has not yet responded to requests for comment from media outlets.

The company’s growth surged in late 2022 with the release of its ChatGPT chatbot, a momentum that has carried forward with new product launches for businesses and a move into AI-generated photos and videos. OpenAI has doubled its weekly active users since late last year, reaching 200 million, according to the company.

This update follows a preview of OpenAI’s latest AI model, o1, which focuses on advanced reasoning and tackling complex problems. It also comes shortly after OpenAI CEO Sam Altman met with leaders from Anthropic, Nvidia, Microsoft, Google, Amazon, and several American energy companies at the White House to discuss AI’s role in energy infrastructure.

During the meeting, the group explored ways to align public and private sector efforts around AI’s energy consumption, data center needs, semiconductor manufacturing, and grid capacity, sources told CNBC.

As we reported earlier, despite surpassing $3.4 billion in revenue earlier this year, OpenAI is expected to face losses nearing $5 billion by the end of the year. The company has so far spent $8.5 billion on AI development and staffing, driving its growth to become the most highly valued AI startup.

This funding round is anticipated to be the largest for OpenAI since Microsoft’s significant investment in January 2023. Despite strong revenue numbers, OpenAI is facing substantial financial hurdles as it continues to pour resources into AI research and expand its operations.

Meanwhile, the current fundraising efforts are modest compared to the $7 trillion funding that OpenAI CEO Sam Altman reportedly aimed for in February. This ambitious funding was part of Altman’s strategy to significantly increase the global supply of AI chips.

Founded in 2015 by Sam Altman and Elon Musk, OpenAI started as a nonprofit focused on developing safe and beneficial artificial general intelligence. In 2020, it shifted to a commercial model, marking a significant shift in its strategy. Despite internal challenges, including Altman’s brief departure in November, OpenAI remains at the forefront of the AI industry, driven by the success of ChatGPT, launched in 2022.