OpenAI is in talks to raise up to $40 billion in a funding round led by SoftBank, which could potentially value the ChatGPT maker at $300 billion—double its October valuation of $157 billion. This would make it the second-highest valuation for a private company, only behind SpaceX. The funding aims to support OpenAI’s $18 billion commitment to the Stargate data center project and sustain its expensive operations, as competition intensifies with China’s DeepSeek offering powerful, low-cost AI models. If secured, this would mark Silicon Valley’s largest funding round ever, indicating that investors still see significant upside in OpenAI despite its projected $5 billion loss last year.
My Take
A $300 billion valuation amid rising AI competition underscores OpenAI’s aggressive growth ambitions, but it also raises questions about sustainability. As rivals like DeepSeek offer capable, low-cost AI models, OpenAI’s long-term success may hinge less on having the most advanced model and more on securing control over high-performance computing infrastructure (like Stargate), expanding its enterprise partnerships (e.g., Microsoft’s Azure integrations), and embedding its AI deeply into business workflows where switching costs are high.
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Credit: WSJ
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