OpenAI appears to be definitively answering its doubters’ biggest question
The AI boom is power constrained. It’s chip constrained.
But it will not be capital constrained.
That’s the top takeaway from media reports from The Wall Street Journal and Reuters that OpenAI is plotting an IPO.
That message is also corroborated by anecdotal reports that the order book for Meta’s $25 billion bond offering is roughly $125 billion (!), per a source familiar with the situation.
My colleague David Crowther recently wrote that OpenAI would likely need to raise $50 billion to $75 billion to fund its spending ambitions, which are poised to drive $115 billion in cash burn through 2029.
The most common question raised by OpenAI skeptics has been, “Where is OpenAI going to get all this money?”
A mulled IPO might suggest that OpenAI’s ability to raise money from private markets is reaching its limits. But it also tells us the answer to that question is “from literally anyone who wants to.”
And in a world where SPACs are back and speculation is rampant, something we should have known all along is that people want to. The technology and the unit economics of AI will have to prove their failures, or reach a much higher level of saturation, before capital will shy away from an opportunity billed as this transformative.
Per Reuters, OpenAI is looking to raise about $60 billion at a $1 trillion valuation from the offering — significantly reducing any funding needs through 2029 in one fell swoop.
That message is also corroborated by anecdotal reports that the order book for Meta’s $25 billion bond offering is roughly $125 billion (!), per a source familiar with the situation.
My colleague David Crowther recently wrote that OpenAI would likely need to raise $50 billion to $75 billion to fund its spending ambitions, which are poised to drive $115 billion in cash burn through 2029.
The most common question raised by OpenAI skeptics has been, “Where is OpenAI going to get all this money?”
A mulled IPO might suggest that OpenAI’s ability to raise money from private markets is reaching its limits. But it also tells us the answer to that question is “from literally anyone who wants to.”
And in a world where SPACs are back and speculation is rampant, something we should have known all along is that people want to. The technology and the unit economics of AI will have to prove their failures, or reach a much higher level of saturation, before capital will shy away from an opportunity billed as this transformative.
Per Reuters, OpenAI is looking to raise about $60 billion at a $1 trillion valuation from the offering — significantly reducing any funding needs through 2029 in one fell swoop.
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