OpenAI will fall the hardest when the AI bubble bursts, analyst says
Wednesday, the artificial intelligence startup announced it had completed a $6.6 billion funding round, valuing it at $157 billion . The ChatGPT-maker’s raise is the largest private investment ever and puts OpenAI among the top three largest startups with venture backing , Bloomberg reported.
“OpenAI needs follow-on funding to expand model training efforts and build proprietary products,” Brendan Burke, senior emerging technology analyst at PitchBook (MORN ), said in a statement shared with Quartz. With the funding, OpenAI can keep up with its new competitor, xAI, which recently raised $6 billion , in building custom data centers, Burke said. He added that both multibillion-dollar raises show “the quantum of funding needed to remain competitive for frontier training efforts with the latest hardware.”
However, Richard Windsor, founder of research firm Radio Free Mobile, said in a note after OpenAI’s raise that the startup “has capitalized on investors’ desperation to invest” in AI and set “very unusual terms that are yet another indication that AI remains in the midst of its 4th and largest bubble.”
