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OpenAI Plans Funding Round To Potentially Reach $340 Billion Valuation

OpenAI, the pioneering artificial intelligence startup, is reportedly exploring a new funding round that could push its valuation to an impressive $340 billion, more than double its current worth. This comes amidst growing competition from the emerging Chinese AI company DeepSeek, according to The Wall Street Journal.

Key Details

According to the Journal, OpenAI is in the early stages of raising $40 billion in this upcoming round. Sources close to the matter, speaking anonymously, caution that discussions are still ongoing and the deal could fall apart at any moment.

This potential funding round would bring OpenAI’s value to $340 billion, a substantial leap from its latest $157 billion valuation, which followed a successful $6.6 billion raise in October.

In previous reports, the Journal revealed that Japanese investment giant SoftBank is expected to take the lead in this funding round, contributing somewhere between $15 billion and $25 billion.

OpenAI hasn’t yet to comment on the matter.

How OpenAI’s Valuation Stacks Up Against Its Rivals 

While OpenAI’s valuation has reached $157 billion as of October, Elon Musk’s xAI is valued at around $50 billion. In comparison, Amazon-backed AI startup Anthropic is valued at $18 billion and is said to be in discussions for a funding round that could bring its valuation up to $60 billion. Meanwhile, DeepSeek, the Chinese AI firm, is estimated to be worth at least $1 billion, though some analysts believe it could be valued much higher, even without generating significant revenue yet.

Although not solely AI-focused, tech giants Microsoft and Meta have allocated $80 billion and $65 billion, respectively, towards AI for the current fiscal year, according to Reuters.

The Bigger Picture 

OpenAI holds the title of the highest-valued U.S. AI startup and has seen its value soar more than fourfold from 2023 to 2024. The nonprofit company reported a monthly revenue of $300 million as of August, with projected annual sales of $3.7 billion for 2024, as per The New York Times. OpenAI is also at the helm of Project Stargate, a large-scale AI infrastructure initiative that includes partnerships with Oracle and Nvidia. This project aims to build multiple AI data centers across the U.S. and create hundreds of thousands of American jobs.

However, the massive funding behind OpenAI and other U.S.-based AI companies has come under scrutiny in recent days, especially with the rise of DeepSeek. The Chinese startup has claimed that it developed one of its AI models for a fraction of the cost compared to its American counterparts, spending just $5.6 million on GPUs for training. Despite these claims, industry experts like Bernstein analyst Stacy Rasgon have expressed doubts, suggesting that the figure doesn’t account for other significant costs involved in model development.

TikTok Returns To US App Stores 

TikTok is once again available for download in the Apple and Google app stores in the US, following a delay in the enforcement of its ban by former President Donald Trump. The ban’s postponement until April 5 gives the administration additional time to evaluate the situation.

Key Developments

The decision to restore TikTok access came after Google and Apple received reassurances from the Trump administration that they would not face legal consequences for reinstating the Chinese-owned app. According to Bloomberg, US Attorney General Pam Bondi sent a letter outlining these guarantees.

In an executive order signed on January 20, Trump instructed the attorney general not to take enforcement action for 75 days, providing time for his administration to determine how to proceed.

Uncertain Future For TikTok In The US

While TikTok is back on the US app stores, its long-term survival remains uncertain. If no deal is reached by early April to address national security concerns, the app may face another shutdown. ByteDance, the parent company, has insisted that TikTok is not for sale.

Legislation And Pressure On ByteDance

The Protecting Americans from Foreign Enemy-Controlled Apps Act, which passed with bipartisan support in Congress, mandates a nationwide ban on TikTok unless ByteDance sells its US operations. This law was signed by President Joe Biden in April of last year.

In late January, the app was briefly removed from US stores following the ban’s activation, impacting over 170 million American users. However, TikTok was restored soon after, following Trump’s intervention in his first hours as president. During that time, he signed an executive order allowing 75 days for a deal that would safeguard national security. Trump also suggested that the US could take a 50% stake in TikTok, a move he believed would keep the app “in good hands.”

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