OpenAI eyes $1.2 trillion funding round: report

OpenAI has begun preliminary conversations with investors about another funding round that could push its valuation beyond $1.2 trillion, following the launch of its newest advanced AI model, The Wall Street Journal reported on Tuesday.

The developer of ChatGPT was valued at $852 billion in March after securing $122b in financing from investors such as Amazon, Nvidia and SoftBank.

If the new funding round moves forward, it would come ahead of the company’s initial public offering, which is now expected to take place next year, according to the report.

The startup is competing closely with Anthropic for leadership in the AI industry while also dealing with increased competition from a growing number of cheaper Chinese open-weight AI models.

Read: OpenAI, Anthropic and Google are working to create an AI standards body

Since its previous fundraising round, OpenAI has reported that its number of active users has surpassed one billion, while more than 200 million businesses now use its AI models. Its AI-powered coding tool, Codex, has also experienced significant growth. The company recently introduced Astra, a new model it characterised as the world’s most intelligent and aligned model.

OpenAI generated $6.7b in revenue during the three months ending in June, compared with $5.7b in the first quarter. However, its operating margin declined, pushing back expectations that the company could become profitable before an IPO.

Speaking with Fortune this month, OpenAI CEO Sam Altman said the company was unlikely to pursue a public listing this year, pointing to concerns surrounding AI safety.

“I actually think that, given everything happening with safety, right now would be an ill-advised moment to go public, and we don’t feel pressure on that,” Altman said.