From its convoluted non-profit-for-profit structure to the brief ouster and return of its CEO, there is not much about OpenAI that’s typical. The startup’s latest funding round, which would reportedly value OpenAI at a whopping $103 billion, is a case in point. According to The Wall Street Journal, OpenAI is in talks to raise several billion dollars in a new funding round. In addition to traditional VC investors—with Thrive Capital reportedly contributing $1 billion to lead the round—a who’s who of Big Tech powers such as Apple and Nvidia may apparently also join the funding party. Of course, OpenAI already has a very prominent Big Tech heavyweight in its corner: Microsoft, which invested $13 billion in the ChatGPT maker less than two years ago. According to the recent reports, Microsoft is also considering investing in the current round (though it’s not clear if the investment would be in cash or cloud computing credits). The string of questions all of this raises is enough to tie up anyone’s tongue. Is there any evidence that OpenAI’s business can justify all this investment? Why are all these tech companies piling in? Can they get any return from OpenAI given its profit-capped structure? And isn’t the tech industry under intense scrutiny from antitrust regulators who might look askance at such concentration? As the OpenAI funding mega deal moves closer to completion, some of the answers to the questions will likely start to come into focus. In the meantime, here are some key points to consider if you’re trying to get a grasp of what’s happening. OpenAI’s revenue is reportedly just over $3 billion, putting the potential new valuation at more than 30 times the money it brings in. Most of its revenue comes from enterprise sales of ChatGPT, with very little coming from individual consumer subscriptions to the tool, and OpenAI is far from profitable, a person familiar with the company told Fortune.
Full story : Apple and NVIDIA investment in OpenAI would take its valuation to a whopping $100 billion.
