OpenAI Needs to Raise More Money Again Soon

OpenAI just raised one of the biggest private pools of capital in Silicon Valley history. Ironically, one of the biggest questions is how soon it will try to raise that kind of money again, thanks to its high cash burn.

Its $6.6 billion financing capped a convoluted and sometimes chaotic process that spanned continents. Investors are valuing OpenAI at $157 billion—on par with publicly traded firms like Siemens, Goldman Sachs and Uber—nearly double its value from a financing a year ago. 

OpenAI is at an earlier stage of its life than those companies, and is growing much faster. It has projected revenue will grow 200% next year, to $11.6 billion, and $25.6 billion in 2026, as Cory reported in his Wednesday profile of CFO Sarah Friar. But, there’s a cost to that growth, of course. OpenAI may possibly burn $5 billion this year. Even so, if OpenAI revenue reaches the 2025 projection, its new valuation will look cheap!