OpenAI raises $11B at a $1.25T valuation
247wallst.comThe real headline is that they couldn’t hit what they wanted in terms of valuation and funds raised. Just were not enough people willing to invest given concerns that it may be downhill from here for a while on AI.
I think OpenAI is one of the most important companies in a generation, but on a tangent, I remember the first time a company broke a $1T market cap, and it was a significant moment. Nowadays multi-trillion-dollar valuations are becoming more common — I wonder how much it reflects inflation vs companies being genuinely bigger than they used to be. If it’s more about inflation, then we can expect to see dozens and hundreds more in the coming decades. Founders: recalibrate your ambition for the new era.
It is pretty much all inflation. Just look at the gold price over the same time frame. Gold did not become more productive or scarce. In fact, we have more of it now than we ever had.
This valuation is a function of early accumulation of compute. They could rent it to Anthropic, or poach more Anthropic engineers.
Not sure how long you'll be able to sell compute to anthropic for. They are constrained right now but they have an insane pipeline of take or pay contracts, and if those are delivered they'll be drowning in compute in a couple of years time.
How many companies have a public market valuation over 1T, that seems like a lot
About 14:
Apple ($4.98T), NVIDIA ($4.51T), Microsoft ($3.94T), Alphabet ($3.49T), Amazon ($2.80T), TSMC ($1.95T), SpaceX ($1.82T), Saudi Aramco ($1.69T), Meta ($1.56T), Tesla ($1.42T), Broadcom ($1.40T), Berkshire Hathaway ($1.22T), Eli Lilly ($1.21T), (Walmart ($0.996T))
It's cheap if you buy the story that they're building a digital god to rule us all.
They wanted to raise 20 billion "from family offices and high net-worth individuals", i.e., fleece the Saudis again but failed:
https://www.wheresyoured.at/running-dry/
They got a bit of pocket change at this insane valuation.
The story here is that Sam wanted to raise a lot more, but could not. Investors almost certainly want to see how the Anthropic IPO plays out before deciding whether to keep showering these companies with money.
Valuation wouldn’t hold if public. He couldn’t raise the 30B he wanted. I’m not sure how much runway OpenAI has, but sounds like a similar to Anthropic story with valuation likely if in the public markets declining.
Sam raised a $100B in previous round. I think a direct listing ipo would see their valuation go up to $4T, and then they could do some at the market sales as needed.
why not just value it at 40T if we're all just throwing numbers randomly