OpenAI to Decide Which Backers to Let Into $6.5 Billion Funding
(Bloomberg) -- OpenAI’s latest fundraising is nearing completion, with prospective investors set to find out Friday whether they’ll be part of the deal, according to people familiar with the matter.
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The $6.5 billion funding round for the artificial intelligence startup is oversubscribed, meaning investors were hoping to put in more money than the company was ready to take on, said the people, who asked not to be identified discussing private information. One of the people said that the excess demand was in the billions of dollars, and some investors will find out Friday that they did not make the cut.
OpenAI declined to comment.
Several strategic investors, including OpenAI’s biggest backer Microsoft Corp. and new investors Nvidia Corp. and Apple Inc., are likely to get access, the person said.
The deal is set to value OpenAI at $150 billion, a total that doesn’t include the new investment, people familiar with the matter told Bloomberg. The company was last valued at $86 billion in an earlier financing deal.
At least one notable existing OpenAI investor won’t be participating — Sequoia Capital, the people said. Sequoia recently backed a rival AI business, Safe Superintelligence Inc., which was started by OpenAI co-founder Ilya Sutskever, who departed the Sam Altman-led company earlier this year. Sequoia didn’t immediately respond to a request for comment.
Existing investor Thrive Capital is leading the current round and writing a check for $1.25 billion, the people said. Thrive Capital declined to comment.
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