The eye-popping $100 billion of capital OpenAI wants in a new funding round has everyone wondering where that kind of cash might come from. The round would value the company at about $750 billion prior to the cash infusion, we’ve reported. U.S. financial investors—including big retail fund managers that back private startups—are likely to supply just a fraction of the total, say $10 billion, because even those with hundreds of billions of dollars in assets under management limit their exposure to any one company.
U.S. financial investors—including big retail fund managers that back private startups—are likely to supply just a fraction of the total, say $10 billion, because even those with hundreds of billions of dollars in assets under management limit their exposure to any one company.
Cash-rich tech companies, especially those eager to win OpenAI’s cloud business, could take a bigger slice. Our colleagues earlier this month reported that Amazon is in talks to invest at least $10 billion in the company, a deal that could help OpenAI afford some of the $38 billion it plans to spend on AWS servers in the coming years.
The list of companies that want a piece of OpenAI’s unprecedented spending on servers is long. Already this year, Nvidia pledged to invest up to $100 billion in OpenAI to help the ChatGPT maker build its own data centers (and presumably use Nvidia’s chips to power them), though that deal isn’t finalized. OpenAI might also ask the chipmaker to contribute to the new equity round, as Nvidia did last year.
Another seemingly obvious source of additional capital would be SoftBank, but the Japanese conglomerate already has invested or committed more than $32 billion to OpenAI, largely from a round earlier this year that valued OpenAI at $260 billion before the investment. (It hasn’t yet closed that funding, but it’s trying to do so before the end of this year.)
To put in much more, SoftBank’s Masayoshi Son may have to sell stakes in public companies or hope some of its private investments go public, as this story lays out.
Microsoft, which previously invested more than $13 billion in OpenAI and holds a 27% stake in the company, might consider plopping in more dough to preserve the size of that stake.
Another potential investor is Apple, which has about $132.4 billion in cash and other liquid securities on its balance sheet and already has an agreement with OpenAI to handle some queries for users of Apple’s Siri assistant. However, Apple is planning to use Google to handle such queries in the future, so its relationship with OpenAI seems up in the air.
Could any of the big banks write big checks? It’s possible, especially as they all hope to curry favor with a company likely to have a huge public offering in the next few years. JPMorgan, Goldman Sachs, Morgan Stanley and others have lent money to the startup. All are also customers of OpenAI. And JPMorgan recently said it’s open to writing equity checks of up to $10 billion each in companies working on critical U.S. technologies, including AI.
Then there’s the sovereign wealth funds. MGX, the Abu Dhabi-based fund backed by the United Arab Emirates government, could step up and take a large chunk of the funding round. It invested in OpenAI’s $6.6 billion round in October last year and recently participated in a $6 billion tender offer valuing the company at $500 billion.
MGX has both the will and the firepower to participate in a big way. One question will be whether MGX wants to favor OpenAI or its competitors—including Anthropic and xAI—that MGX has also backed. Similarly, Singapore’s GIC could make a play, though it’s already invested in Anthropic.
The other major sovereign investor to watch is Humain, the AI initiative of Saudi Arabia’s $925 billion Public Investment Fund. Our colleague Sri Muppidi reported that PIF talked to OpenAI about investing in the SoftBank-led financing this year. It’s unclear if the Saudis ended up participating, but they’ve certainly shown interest.
Humain would likely want OpenAI to build data centers in Saudi Arabia, as xAI is doing, to ensure some of the funding flows back to the Gulf nation. OpenAI is already working on a data center project in the UAE with G42, another backer of MGX.
Do all of those sources add up to $100 billion? It’s possible. Or OpenAI could get creative with its funding, counting financing like debt for chip development, data centers and power generation in the total.
OpenAI CEO Sam Altman has said the company is not interested in a federal guarantee for its data centers. But there is some precedent for U.S. investment in private energy infrastructure, for instance. The U.S. government recently agreed to work with nuclear company Westinghouse on $80 billion worth of reactors in exchange for a potential equity stake in the company, should it go public in the next few years.
Very little about OpenAI’s fundraising trajectory would have seemed reasonable three years ago. It’s a safe bet that its next round will contain some surprises.
