OpenAI said on Friday it is raising $110 billion in a blockbuster funding round that would value the ChatGPT maker at $840 billion, in a deal that signals the feverish pace of investment in artificial intelligence.
The funding round – one of the largest private capital raises on record – includes a $30 billion investment from SoftBank, $30 billion from Nvidia, and $50 billion from Amazon, and comes ahead of the AI startup’s expected mega-IPO later this year.
More investors are expected to join the round as it progresses, OpenAI said.
Big Tech companies and large tech investors such as SoftBank are racing to forge partnerships with OpenAI – which is spending heavily on data centers – betting that closer ties with the company would give them a competitive edge in the AI race.
For OpenAI, the fresh cash will help secure advanced AI chips and the computing capacity that it needs to maintain its pole position in the AI industry, especially as competition heats up from rivals such as Claude chatbot maker Anthropic and Google’s Gemini.
OpenAI is targeting roughly $600 billion in total compute spend through 2030.
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Along with the $50 billion investment, OpenAI and Amazon have also struck a deal in which OpenAI will utilize 2 gigawatts of computing capacity powered by Amazon’s in-house Trainium AI chips.
The companies are also expanding their $38 billion cloud deal signed last year, with OpenAI saying it would spend an additional $100 billion on Amazon Web Services over the next eight years. As well, OpenAI will work with Amazon to develop customized models for the e-commerce giant’s engineering teams.
Amazon will start with an initial $15 billion investment, followed by another $35 billion in the coming months when certain conditions are met, the companies said.
Amazon Web Services will also be the exclusive third-party cloud provider for OpenAI Frontier, the ChatGPT maker’s enterprise platform for building and running AI agents.
Source: Financeyahoo