Its become ridiculous how much money these companies are spending to compete with each other on AI.
Reuters reported that OpenAI has been pushing to raise around $30 billion in investment from various companies. They want to secure these investments before Anthropic goes public which they have scheduled to happen in mid November. If OpenAI can secure $30 billion they will be valued at around 1.4 Trillion.
Why they need to move before Anthropic
As stated earlier Anthropic is planning to go public next month. When companies go public all their finances become public as well.
They want to make sure they secure the interest of larger companies such as sovereign wealth funds. Once Anthropic is public these companies will be able to compare notes on the two companies.
Anthropic revenue increased to 16.8 Billion in the third quarter. Coming from 11.6 billion in the second quarter. Investors have started questioning these insane valuations with the recent decrease in growth month over month.
OpenAI Revenue Projections
OpenAI has told investors they are projected to hit 50 Billion in annual revenue run rate. By the end of the year they expect to be making 70 Billion a year. This increase will come from their new model GPT-6 Astra being released.
They currently have a valuation of 852 Billion after receiving 122 Billion in investment earlier this year. So 1.4 Trillion would put them in the upper echelons of companies.
Can they get there?
Probably not guaranteed. With all the volatility in the tech market. Bond prices are increasing and many on wall street are starting to question how much debt we will need to build out more A.I. data centers.
These companies believe that who ever has the most money will win the AI race. OpenAI just wants to make sure they have enough cash on hand when that happens.