OpenAI has closed a new funding round that could total $110 billion, valuing the ChatGPT maker at $730 billion pre-money and potentially putting it on course for an IPO in the second half of the year:
The new funding round comes on top of the $40 billion already on OpenAI's balance sheet, giving the company more runway to rapidly expand and develop new models and AI infrastructure. OpenAI expects to remain unprofitable until 2030, when management forecasts it will turn free cash flow positive.
In a separate release, Amazon detailed its major multi-year partnership with OpenAI, centered on enterprise AI infrastructure, distribution, and custom model development.
Here are the highlights of the Amazon-OpenAI investment:
- Amazon will invest $50 billion in OpenAI, with $15 billion upfront and another $35 billion later if certain conditions are met.
- AWS and OpenAI will jointly build a "Stateful Runtime Environment" powered by OpenAI models and offered through Amazon Bedrock, aimed at helping customers run AI apps and agents with persistent context, memory, tool access, and compute.
- AWS becomes the exclusive third-party cloud distribution provider for OpenAI Frontier, OpenAI's enterprise platform for building and managing teams of AI agents.
- OpenAI will expand its AWS infrastructure commitment by $100 billion over 8 years, on top of an existing $38 billion agreement.
- As part of that, OpenAI will use roughly 2 gigawatts of AWS Trainium capacity, spanning Trainium3 and future Trainium4 chips, to support Frontier, Stateful Runtime, and other advanced workloads.
- OpenAI and Amazon will also develop custom OpenAI-based models for Amazon's customer-facing apps, giving Amazon teams another model option alongside its in-house Nova family.
"OpenAI and Amazon share a belief that AI should show up in ways that are practical and genuinely useful for people," OpenAI boss Sam Altman stated, adding, "Combining OpenAI's models with Amazon's infrastructure and global reach helps us put powerful AI into the hands of businesses and users at real scale."
Altman commented on today's announcement, saying, "As long as revenue keeps growing, the deals are not circular."
Previously:
- $100 Billion Mega Deal Between OpenAI and Nvidia is on Ice
- Venture Capital Valuations of AI Startups Surge and Raise Fears of an AI Bubble Forming
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AI Startup Valuations Raise Bubble Fears as Funding Surges
Artificial intelligence startups are attracting record sums of venture capital, but some of the world's largest investors warned that early-stage valuations are starting to look frothy, senior investment executives said on Friday.
"There's a little bit of a hype bubble going on in the early-stage venture space," said Bryan Yeo, group chief investment officer at Singapore sovereign wealth fund GIC (GIC.UL), as part of a panel discussion at the Milken Institute Asia Summit 2025 in Singapore.
"Any company startup with an AI label will be valued right up there at huge multiples of whatever the small revenue (is)," he said. "That might be fair for some companies and probably not for others."
In the first quarter of 2025, AI startups raised $73.1 billion globally, accounting for 57.9% of all venture capital funding, according to PitchBook. The surge was driven by funding rounds like OpenAI's $40 billion capital raising, as investors raced to catch the AI wave.
"Market expectations could be way ahead of what the technology could deliver," Yeo said. "We're seeing a major AI capex boom today. It is masking some of the potential weaknesses that might be going on in the economy."
Todd Sisitsky, president of alternative asset manager TPG said the fear of missing out is dangerous for investors, though he added that views were divided on whether the AI sector had formed a bubble.
Some AI firms are hitting $100 million in revenue within months, he said, while others in early-stage ventures command valuations at between $400 million and $1.2 billion per employee. He said that was "breathtaking."
And perhaps a case in point? . . .
Database Startup Supabase Notches $5 Billion Valuation in Funding Round
Database startup Supabase notches $5 billion valuation in funding round - The Economic Times:
Open-source database startup Supabase said on Friday it has secured a valuation of $5 billion in its latest funding round, as investors continue to back companies riding the wave of the artificial intelligence boom.
[...] Supabase is a backend platform that helps developers build applications quickly and has benefited from the rise in AI-powered coding assistants.
The platform is built on the PostgreSQL open-source database, a system for organizing and managing information online.
The latest capital-raise comes just months after Supabase's Series D round, which reportedly valued it at $2 billion.
[...] Coding platforms such as Lovable and Bolt run on Supabase, which caters to more than four million developers. The company's customers also include enterprises such as PwC, McDonald's and Github Next.
"This new financing aims to accelerate Supabase's efforts to become the backend for everyone, from startups to some of the most demanding, data-intensive enterprise workloads," said Caryn Marooney, general partner at investment management firm Coatue.
The Wall Street Journal reports that NVIDIA's plan to invest $100 Billion in OpenAI may fall through.
Links:
- https://www.wsj.com/tech/ai/the-100-billion-megadeal-between-openai-and-nvidia-is-on-ice-aa3025e3 (Paywalled)
- Is the Stalled Nvidia-OpenAI Megadeal AI's First Domino to Fall?
- Stalled Deal?
- Nvidia CEO pushes back against report that his company's $100B OpenAI investment has stalled
According to "people familiar with the matter," Jen-Sen Huang has been privately downplaying the $100 billion / 10 gigawatt deal that was announced with OpenAI this past September. According to the WSJ's sources, talks between the two companies never got past "early stages." The article also claims that Jen-Sen has asserted, in private, that the September deal was non-binding. This is corroborated by a November filing by Nvidia admitting that there was "no assurance" of a "definitive agreement" with OpenAI. (CNBC source: https://www.cnbc.com/2025/11/19/nvidia-says-no-assurance-of-deal-with-openai-after-100-billion-pact.html )
Furthermore, on Saturday, Jen-Sen told reporters in Taipei that, while Nvidia will invest "a great deal of money" in OpenAI's latest funding round, it would be "nothing like" $100 billion. (Bloomberg link: https://www.bloomberg.com/news/articles/2026-01-31/nvidia-to-join-openai-s-current-funding-round-huang-says ).
However, the NVidia CEO Jensen Huang said Saturday that a recent report of friction between his company and OpenAI was "nonsense."
This is probably a good reminder to be skeptical of media reports of a deal in dollars or in gigawatts. Was a contract actually signed, or was it just an announcement?
(Score: 0) by Anonymous Coward on Saturday February 28, @09:29PM
with no concerns of federal interference with the appropriate
"gifts" to The Man
(Score: 2, Touché) by Anonymous Coward on Saturday February 28, @09:37PM
If they truely ate their own AI dogshit, why would they
need buildings for meatbags?
(Score: 5, Funny) by hopp on Saturday February 28, @10:43PM (3 children)
Altman commented on today's announcement, saying, "As long as revenue keeps growing, the deals are not circular."
As long as the radius keeps expanding, the shape is not a circle.
(Score: 2) by looorg on Sunday March 01, @12:55AM (1 child)
If the radius keeps expanding that would still be a circle. Just a bigger one. Either I'm missing something or there is a wooshing sound coming as I didn't get the joke.
Still his quote was mindbogglingly stupid. Sure I guess an argument could be made for that if the revenue isn't spread equally along the circumference of his business buddies then it's not circular. Still I'm not sure if it would be better if the deals are elliptical or some other kind of polygon or polyhedron shape. I'm not sure whom he is trying to fool tho if he doesn't believe that they are basically pushing the funds around between them pumping each other up -- one buys from another, that buys from another that ... which eventually buys from the first one. Going full circle (or some other shape). They are clearly just passing the $$$ around. In some kind of perhaps not perfectly circular fashion.
(Score: 1) by khallow on Sunday March 01, @01:54AM
There is a wooshing sound. I think the problem is not that we have an expanding circle but rather the reverse. Because they need to spend more on infrastructure, the circle will need to get tighter (smaller radius) to recycle the creativity more often and thoroughly.
(Score: 5, Touché) by https on Sunday March 01, @01:49AM
You are correct. The shape is a kite [wikipedia.org].
Offended and laughing about it.
(Score: 3, Touché) by Captival on Monday March 02, @10:02PM
According to every Reddit genius, they're 100% doomed! How dare a bunch of rich people invest in them when every AI cartoon someone makes causes 10 gallons of water to magically vanish off the face of the earth!