OpenAI is close to finalising the first phase of a funding round that could bring in more than $100 billion, according to a Bloomberg report. If completed, it would be one of the largest private funding rounds ever and could push the company’s valuation beyond $850 billion.
But the key question is: why does OpenAI need such a large amount of money?
According to the report, the funding is linked to three major areas — infrastructure spending, expanding artificial intelligence tools, and deeper partnerships for chips and cloud computing.
INFRASTRUCTURE SPENDING RUNS INTO TRILLIONS
As per the report, ChatGPT maker prepares to spend trillions in infrastructure investment”, the company is raising fresh capital.
Infrastructure in AI does not mean office buildings. It refers to massive data centres, high-performance computing clusters and networking systems needed to train and run large AI models.
These facilities require specialised hardware, cooling systems, electricity and land.
Training advanced AI models consumes huge computing power. Running them for millions of users daily also demands continuous server capacity. Building and maintaining this infrastructure costs billions of dollars each year, which explains the need for large funding.
BUILDING OUT AI TOOLS IS CAPITAL-INTENSIVE
The report also said the financing deal would “give the startup additional capital to build out its artificial intelligence tools.”
Developing AI tools like ChatGPT involves constant research, testing and upgrades. Models need to be retrained with fresh data and improved architecture. That process requires expensive chips and computing time.
In addition, product expansion means integrating AI into enterprise services, software platforms and developer tools. Hiring top engineers and researchers also adds to costs. AI talent is among the most expensive in the technology sector.
All of this makes scaling AI tools a capital-heavy exercise.
EXPANDING USE OF AMAZON’S CHIPS AND CLOUD
Bloomberg further reported: “As part of its partnership with Amazon, OpenAI is expected to expand its use of Amazon’s chips and cloud computing services.”
Cloud computing services charge companies based on usage. The more computing power required, the higher the bill. AI workloads are among the most demanding in the tech industry.
Specialised AI chips are also expensive. Advanced processors used for training and running AI models can cost tens of thousands of dollars per unit. Large AI systems require thousands of such chips working together.
If OpenAI increases its use of Amazon’s infrastructure, it will need significant financial backing to support those long-term commitments.
VALUATION AND INVESTOR BACKING
Bloomberg reported that the company’s pre-money valuation is expected to remain at $730 billion, and with the funding included, its valuation could exceed $850 billion.
The first phase of funding is expected to come from strategic investors including Amazon, SoftBank, Nvidia and Microsoft, according to the report. A second phase may involve venture capital firms and sovereign wealth funds.
The deal is not yet final and details could change.
For now, what is clear from Bloomberg’s reporting is that OpenAI’s funding push is closely tied to infrastructure expansion, AI tool development and large-scale cloud and chip partnerships. All three areas require deep capital, which explains why the company is targeting one of the biggest fundraising rounds in tech history.
