Investors value OpenAI at over $100 billion on the secondary market, reflecting strong confidence in its future potential
According to sources who spoke with The Wall Street Journal this week, OpenAI is currently discussing securing a new round of funding at a valuation of $100 billion or more.
It has been discovered that investors have already demonstrated their willingness to place a high value on the company to secure a spot on OpenAI’s coveted capitalization table.
Multiple companies that monitor or facilitate secondary transactions, in which investors acquire shares from existing investors rather than directly from the company, have observed that investors have paid prices that suggest a valuation of over $100 billion.
The Journal reports that OpenAI is purportedly negotiating a primary deal with Thrive Capital, which Josh Kushner leads. Microsoft, Nvidia, and Apple are also rumored to be investors.
The investment is expected to be $1 billion. This would represent a significant advancement for the AI leader. Bloomberg reported that the company was most recently valued at $86 billion in a secondary transaction that involved existing stakes in September.
Nevertheless, Rainmaker Securities, a securities trader, has observed investors bidding on OpenAI stock at prices that could potentially value the company at $143 billion.
Based on secondary activity and prior traditional financing rounds, Caplight, a secondary data tracking platform, predicts that the company is currently valued at over $111 billion.
Glen Anderson, co-founder and managing partner at Rainmaker Securities, told TechCrunch, “There are numerous investors who are eager to participate in this narrative and invest in this company.”
“So is a $100 billion valuation considered to be extravagant?” Potentially. However, it may be a bargain if OpenAI can fulfill its potential.
Greg Martin, a managing director and co-founder of Rainmaker Securities, stated that the company’s revenue has increased rapidly, in addition to the company’s valuation.
He stated that it is essential to acknowledge that OpenAI has experienced a significant increase in revenue, from zero a few years ago to billions today, even though the company continues to consume a considerable amount of cash.
According to The Information, the organization will achieve $2 billion in annual revenue by the year’s conclusion.
Martin acknowledged that it is challenging to determine an accurate valuation for OpenAI; however, there is substantial demand. “The company is concerned about the possibility of not receiving the premium it is supposed to receive.”
There is a compelling argument that the company could be valued at a trillion dollars.
Even though the next official valuation of OpenAI has not yet been determined, Martin is sure that this funding round will generate additional secondary activity regarding OpenAI and other AI competitors.
He anticipates it will also increase the valuation of companies such as Anthropic, Cohere, Hugging Face, and others.
“It creates a buzz.” It incites enthusiasm. Martin stated that it resets market expectations.
