Get ready for the most obscene display of excess in the tech industry’s history. OpenAI is on the cusp of securing a jaw-dropping $100 billion valuation in its latest funding round, sources told The Wall Street Journal. And why not? Investors are willing to shell out top dollar to get a piece of the AI pie.
But let’s be real, this valuation is nothing short of a scam. It’s a classic case of hype-driven valuation inflation. Investors are throwing money at OpenAI like it’s going out of style, not because the company has actually earned it, but because they don’t want to miss out on the action. Multiple secondary deal-tracking companies have seen investors paying top dollar for OpenAI shares, with some even valuing the company at a staggering $143 billion.
And who’s leading this charge? None other than Josh Kushner’s Thrive Capital, which is putting in a whopping $1 billion. And, of course, the usual suspects – Microsoft, Nvidia, and Apple – are also rumored to be investing. Because, you know, it’s not like OpenAI has actually done anything impressive to warrant this kind of attention.
But hey, what do you expect from a company that was valued at just $86 billion just a few months ago? And what about the fact that OpenAI is still hemorrhaging cash, with some reports suggesting it burned through $8 billion in just one quarter? Yeah, no big deal. It’s just a minor detail in the grand scheme of things.
So, what’s the takeaway from all this? Well, for one, it’s clear that investors are more interested in getting in on the action than they are in actually making a smart financial decision. And two, it’s going to be a wild ride for the AI industry, with OpenAI and its competitors experiencing a massive valuation boost as a result of this funding round. Because, let’s face it, who doesn’t love a good bubble?
“There are a lot of investors who really want to be part of this story and want to be an investor in this company,” said Glen Anderson, co-founder and managing partner at Rainmaker Securities. “So a $100 billion valuation, is it rich? Maybe. But, I mean, if OpenAI can live up to [its] potential, it may be a steal.” Yeah, sure, Glen. Because, you know, there’s no such thing as a “bubble” in the tech industry.
Greg Martin, co-founder and managing director at Rainmaker Securities, added that OpenAI’s valuation has risen quickly, but so has its revenue. Because, you know, that’s all that matters. Who needs to actually make a profit when you can just print money?
“Obviously it is hard to put a proper valuation on OpenAI, but we are seeing a lot of demand,” Martin said. “There is a fear of missing out on the premium the company is getting. There is certainly a cogent argument that the company could be worth a trillion dollars some day.” Yeah, because that’s not a ridiculous statement at all.
And there you have it, folks. OpenAI’s next official valuation is still yet to be determined, but one thing is for sure – this funding round will spark more secondaries activity around OpenAI and other AI competitors. And, of course, it will give a valuation boost to companies like Anthropic, Cohere, Hugging Face, and more. Because, you know, who doesn’t love a good bubble?
“It generates buzz. It generates excitement. It resets market expectations,” Martin said. Yeah, that’s what this is all about – generating buzz and excitement, not about making smart financial decisions or actually building a sustainable business.
