Sept 15, V7N - OpenAI is in the process of securing a $6.5 billion financing round through convertible notes, potentially valuing the AI leader at $150 billion, according to sources familiar with the matter. This valuation will hinge on OpenAI's ability to restructure its corporate framework, including removing its current profit cap on investors, which could dramatically increase returns for early backers.

Historically, OpenAI's for-profit arm has operated under a capped-return model, designed to balance its mission of developing artificial general intelligence (AGI) for societal benefit with commercial viability. Investors' returns have been limited, with early funding rounds capped at 100x the original investment. Removing this cap, as part of the restructuring, would need approval from OpenAI's non-profit board, which includes CEO Sam Altman and other key figures.

The potential shift from a non-profit structure to a for-profit benefit corporation mirrors moves made by OpenAI's competitors, such as Anthropic and xAI. If the restructuring succeeds, it would signal a significant transition for OpenAI, founded in 2015 as a non-profit research entity, toward a more commercial approach, leveraging its success with products like ChatGPT.

Existing investors, such as Microsoft, Thrive Capital, and Khosla Ventures, are expected to participate in the funding round, along with potential new investors like Nvidia, Apple, and Sequoia Capital. If the restructuring is not approved, OpenAI would need to renegotiate the valuation of the convertible notes at a lower level. Despite these challenges, the demand for investment remains strong, driven by OpenAI's rapid revenue growth and its leadership in the AI space.

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