OpenAI aims to raise up to 100 billion dollars in a new funding round that could value the startup at 830 billion dollars. Kate Clark and Berber Jin report for The Wall Street Journal that the company needs this capital to fund its expansion. This fundraising effort comes at a time when the initial public enthusiasm for artificial intelligence starts to cool.
Chief Executive Sam Altman seeks to secure these funds by the end of the first quarter. This round serves as a major test for the company amid growing skepticism about massive spending in the sector. SoftBank already agreed to invest 30 billion dollars earlier this year. The startup also recently secured a 1 billion dollar investment from Disney.
To reach its goal, OpenAI plans to recruit sovereign wealth funds from around the world. The company faces high costs and expects to spend more than 200 billion dollars through 2030. Competition with Google remains a primary concern because the tech giant possesses larger cash reserves and lower debt. OpenAI issued an internal “code red” to address this threat.
Investors have become more cautious recently. Market values for partners like Oracle and CoreWeave dipped as shareholders questioned the costs of building new data centers. OpenAI continues to explore the possibility of an initial public offering to sustain its rapid growth.
