After raising $6.6 billion through a round of funding from investors, including Microsoft, NVIDIA, Thrive Capital, SoftBank, and more, to evade bankruptcy with projections of making a $5 billion loss within 12 months, OpenAI is reportedly in talks to raise $40 billion through another round of funding, pushing its market capitalization to approximately $340 billion (via The Wall Street Journal).
According to unnamed sources, SoftBank is slated to lead the funding round with a stake of between $15 billion and $25 billion in the ChatGPT maker. Interestingly, this would dethrone Microsoft as OpenAI's largest investor, passing on the crown to SoftBank.
If OpenAI's funding round negotiations pull through, the AI firm could double its market valuation from October's $157 billion to $340 billion. A portion of the capital raised during the funding round will be reportedly channeled to OpenAI's $500 billion bet on the Stargate project to facilitate the construction of data centers across the United States to bolster its AI advances amid emerging completion from Chinese AI startup DeepSeek.
OpenAI is already under immense pressure from investors to evolve into a for-profit entity. Former OpenAI co-founder and Tesla CEO Elon Musk filed two lawsuits against CEO Sam Altman and OpenAI, citing a stark betrayal of its founding mission and alleged involvement in racketeering activities. Musk claimed he was lured to invest in the AI firm with a fake humanitarian mission.
Market analysts and experts predict OpenAI could be susceptible to outsider interference and hostile takeovers if it fails to meet the for-profit threshold within two years. This would require it to reimburse investors for funds raised to keep its operations afloat. More concerning, analysts predict Microsoft could acquire OpenAI within three years as investor interest in the AI bubble fades and partnership frays.
Despite OpenAI's milestones and uncontested 2-year lead in the AI landscape, the ChatGPT maker could make $44 billion in losses before potentially becoming profitable in 2029. Some of the losses are attributed to the cost of training and running advanced AI models, employee salaries, data, and Microsoft tie-up, which reportedly gets a 20% cut of OpenAI's revenue.
