OpenAI gets $122B to 'just build things' as the world blows them up
War, oil shocks, and market nerves could yet knock the AI boom off course
Opinion OpenAI has secured an additional $122 billion in capital from a diverse group of investors and reached a nominal $852 billion valuation, the highest of any pre-IPO tech company.
The poster child of the LLM era argues it needs the money to help the world "just build things," it said in an online missive.
Backers include its regular partners Amazon, Nvidia, SoftBank, and Microsoft, as well as an all-star cast of venture capitalists.
Curiously for a company that is yet to go public, it is also getting public money. Through "bank channels," it is raising more than $3 billion from individual investors and will be included in "several exchange-traded funds managed by ARK Invest, further broadening ownership and giving more people the opportunity to share in the upside economics of OpenAI and the AI era."
OpenAI's revolving credit has grown to around $4.7 billion supported by a global syndicate including some of the biggest names in the banking sector.
OpenAI has hit 900 million weekly active users and over 50 million subscribers among consumers, but OpenAI thinks half of its revenue will come from enterprise offerings by the end of the year. Business users will be expected to pull their weight to help these ravenous investors get their handsome gains.
OpenAI's business APIs process more than 15 billion tokens per minute while its Codex developer tool now serves over 2 million weekly users, up five times in the past three months, the company said.
To meet that demand for its software and LLMs, OpenAI is working with an "infrastructure portfolio across multiple cloud partners and multiple chip platforms."
OpenAI's infrastructure partners include Microsoft, Oracle, AWS, CoreWeave, and Google Cloud, while its chip suppliers include Nvidia, AMD, AWS again with Trainium, Cerebras, and Broadcom. Its datacenter partners are Oracle, SBE, and SoftBank.
Commentators have been quick to point out that the list has significant crossover with its investors. OpenAI will build datacenters with Nvidia's chips, but Nvidia is also an investor in OpenAI. Microsoft invests in OpenAI, but OpenAI also spends heavily on Azure.
Other linked companies are borrowing heavily. Oracle has increased its borrowing by $50 billion to help build datacenters for OpenAI in a $300 billion cloud deal.
How will all this debt and investment be paid back? "A unified AI superapp" is part of the answer.
"Users do not want disconnected tools," OpenAI said. "They want a single system that can understand intent, take action, and operate across applications, data, and workflows. Our superapp will bring together ChatGPT, Codex, browsing, and our broader agentic capabilities into one agent-first experience."
- OpenAI patches ChatGPT flaw that smuggled data over DNS
- Microsoft takes up residence next to OpenAI, Oracle at Crusoe's 900 MW Texas datacenter expansion
- OpenAI now gets to decide which type of product assassin it will become
- HP stuffs OpenAI LLM into new laptops in bid for small biz
Perhaps OpenAI is hoping its superapp also has superpowers, because it might need them.
As things stand, some observers predict OpenAI will not make a profit until 2030. While the latest funding round is a statement of investor confidence, it's worth considering whether the AI boom belongs in the first half of the decade. A lot might happen in the next few years. The second half of the decade, as determined by the US president, seems more characterized by the Iran conflict and the oil price. Whatever the messy conclusion and whenever it comes, the aftermath will be with us for a while.
S&P Global is already predicting a hit to the AI boom. Tech giants have so far not shown any signs of reducing the staggering capital investments – possibly $1.6 trillion on datacenters to largely meet AI demand by 2030, according to Omdia – but they might.
If the Iran conflict creates a more permanently high oil price, it could see those companies cut spending in the next two quarters as energy costs rise, producing a "really meaningful correction in all equity markets," Melissa Otto, head of research at S&P Global Visible Alpha, told Reuters.
Before the conflict, jitters already abounded. Despite announcing surging profits, Microsoft saw its share price drop 6 percent as investors voiced concerns about the rampant capex growth it needs to support AI demand.
The world doesn't just want to build things. It demonstrably also wants to blow them up. OpenAI's long list of investors and cloud providers might now wonder if they are standing in the blast zone. ®
