Founded in 2015, OpenAI has become a key player in the technology sector's shift towards artificial intelligence. The company, which gained significant attention with the launch of its user-friendly chatbot, ChatGPT, in 2022, is now negotiating to raise $6.5 billion from investors at a valuation of $150 billion. This valuation, which excludes the new funding, marks a substantial increase from its previous $86 billion valuation established earlier this year.
Investor Participation
Alongside the equity raise, OpenAI is also in discussions to secure $5 billion in debt through a revolving credit facility from banks. Sources familiar with the matter, who requested anonymity, indicate that the terms of these negotiations could still change. Flourish Capital is detailed to be driving this financing circular, with Microsoft Corp., OpenAI's biggest financial specialist, moreover anticipated to take part.
OpenAI’s move to seek a revolving credit facility from Wall Street banks follows a trend seen among major tech startups. Companies like Meta Platforms Inc. (formerly Facebook), Alibaba Group, Uber Technologies Inc., and DoorDash Inc. have previously sought such credit lines to strengthen banking relationships ahead of their initial public offerings (IPOs). These credit arrangements often result in better financing terms and a favorable position during IPO processes.
Company Evolution and Future Plans
Since its inception, OpenAI has undergone significant changes. The company briefly replaced its CEO Sam Altman late last year and has since revamped its board of directors and executive team. In a recent memo to employees, OpenAI Chief Financial Officer Sarah Friar outlined that the new financing would support increased computing power and operational expenses. Additionally, Friar mentioned plans to allow employees to sell some of their shares through a tender offer later this year.
OpenAI's Sam Altman-Backed Startup Targets AI's Carbon Footprint with Clean Energy Innovation
Exowatt, a Miami-based startup backed by Sam Altman of OpenAI, has introduced an innovative system to provide affordable, clean energy for data centers. Their modular system combines a solar energy collector with a thermal battery, offering both heat and electricity. With data centers facing high energy demands due to the AI boom, Exowatt’s system has generated a 1.2 gigawatt demand backlog from major data center operators and renewable energy developers. The startup’s unique optical collection technology captures solar energy, stored in a clay-based heat battery, which can be dispatched when other energy sources are more expensive. Their unsubsidized energy cost of $0.04 per kilowatt-hour rivals traditional sources. Exowatt’s first project will launch in West Texas this year, with future expansion planned. The company aims to scale its solution to meet growing demand, although challenges remain in manufacturing and supply chain development.
With inputs from agencies
Image Source: Multiple agencies
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