OpenAI Expects $150 Billion Valuation in New Funding Round

OpenAI is in talks to raise $6.5 billion from investors, valuing the company at $150 billion, according to people familiar with the matter.

The new valuation, which does not include the money raised, is significantly higher than the $86 billion valuation included in the company’s takeover bid earlier this year and confirms its position as one of the most valuable startups in the world.

At the same time, OpenAI is in talks to raise $5 billion in debt from banks in the form of a revolving credit line, said one of the people, all of whom asked not to be identified because the information is confidential.

The startup declined to comment. People familiar with the deal noted that discussions are ongoing and the terms could change.

As previously reported by Bloomberg, the financing round is to be led by Thrive Capital.

. Thrive declined to comment on the latest valuation. Microsoft Corp., the company’s largest investor, is also expected to participate, and Apple Inc. and Nvidia Corp. have been in talks to invest.

OpenAI isn’t the first major tech startup to turn to Wall Street banks for revolving credit. A number of tech companies, including Facebook — now Meta Platforms Inc. — Alibaba Group Holding Ltd., Uber Technologies Inc. and DoorDash Inc., have turned to Wall Street for credit lines ahead of initial public offerings, often in part to strengthen banking relationships.

Historically, companies have tended to reward banks that make large loan commitments with roles in their IPOs. In return, lenders sometimes offer better financing terms.

Founded in 2015, OpenAI has been at the center of the tech industry’s rapid shift toward AI, kicking off an investment frenzy with the 2022 debut of its easy-to-use chatbot ChatGPT. The company’s products, which can generate lifelike images and human-sounding text with just a few words of encouragement, have captured the attention of consumers and investors alike.

OpenAI has grown significantly as a company since its founding, briefly ousting CEO Sam Altman late last year. Today, only a handful of the original founding team remain, and the company has taken steps to overhaul its board and fill out its leadership ranks.

In a note to employees last month, OpenAI Chief Financial Officer Sarah Friar said the funding would support computing power needs and other operating costs, Bloomberg reported. She also said in the note that the startup aims to allow employees to sell some of their shares in a tender offer later in the year.