Investors bid up OpenAI valuation to $143 billion

OpenAI is currently negotiating a new funding round that could value the company at over $100 billion, with reports indicating that investors are willing to bid up to $143 billion for shares on the secondary market. The primary deal is expected to be led by Thrive Capital, with significant contributions from major tech firms like Microsoft, Nvidia, and Apple. This marks a substantial increase from OpenAI's previous valuation of $86 billion in September during a secondary sale. The surge in valuation reflects the growing interest from investors eager to be part of OpenAI's journey. Glen Anderson from Rainmaker Securities noted that the demand for OpenAI shares is driven by a fear of missing out on potential gains, as the company has shown remarkable revenue growth, moving from zero to billions in revenue within a few years. OpenAI is projected to reach $2 billion in annual recurring revenue by the end of the year. Despite the rapid increase in valuation, there are concerns about the company's cash burn rate. However, the strong revenue trajectory suggests that OpenAI is on a path to justify its high valuation. Greg Martin from Rainmaker Securities emphasized the difficulty in accurately valuing the company but acknowledged the significant demand and excitement surrounding it. This funding round is expected to stimulate further secondary market activity for OpenAI and its competitors, potentially boosting valuations for other AI companies like Anthropic and Hugging Face. The overall buzz generated by OpenAI's funding efforts is likely to reset market expectations for the AI sector.