OpenAI, DeepSeek Chase Billions as AI Funding Boom Rolls On

SPEAKER_1 (0:02)

Bloomberg Audio Studios, Podcasts, Radio, News. Bloomberg Tech is live from the heart of Silicon Valley with Ed Ludlow in San Francisco.

Ed Ludlow (0:22)

This is Bloomberg Tech coming up. Updates on OpenAI's talks with multiple investors to raise at least $30 billion at a valuation of about $1.4 trillion. The UAE and BlackRock in the mix. Plus more funding users, DeepSeek is also close to securing at least $12 billion in its latest round of funding ahead of its own IPO next year. And we'll hear from JPMorganChase CEO, Jamie Dimon on data centers, AI risks and a lot more from London's Techstars event. That's later. This out has hit right to our top story and update on OpenAI's talks with multiple investors to raise at least $30 billion. Sources say that includes speaking with multiple funds from the United Arab Emirates to help anchor that round. Bloomberg's Senior Tech Editor, Mike Shepard's with us. Let's go through what we're reporting, right? Some of this is new.

Mike Shepard (1:12)

Some of this is new, including one of the key participants, Ed, and that would be the Abu Dhabi-based fund MGX, which is looking to play a substantial role in the syndicate of UAE-based funds that are looking to invest as much as $10 billion in this total $30 billion round. Now, for MGX, Ed, as you know, this is not their first rodeo when it comes to AI investments. They put into previous rounds by both OpenAI and its rival Anthropic, and they've also raised earlier this year as much as $50 billion for AI infrastructure-related investments. And the key thing about this, of course, is that the round itself would take OpenAI's book value on paper to $1.4 trillion, and that would be up from the $122 billion raise that had it at $852 billion just back in March.

Ed Ludlow (2:06)

A lot of people, when we first broke the news of the idea of a round, which was only last week, were saying, well, why would OpenAI do this? And like, what's going on with the IPO? When we first broke that initial report last Tuesday, we didn't have names, but I was able to ask OpenAI CFO Sarah Fryer about a round, this is what she said.

Sarah Fryer (2:25)

We're really well capitalized. We did an $122 billion raise in Q1.

That sits on the balance sheet. That was record-breaking. I always want to make sure we're well capitalized so that we have maximum optionality as a company. We don't know what DOTS is going to do. We're super optimistic. The worst thing would be not to have the compute to go serve it to customers.

Ed Ludlow (2:46)

So you could do a private market round if you need to?

Sarah Fryer (2:48)

Absolutely. There's demand in the marketplace. So if that becomes the right thing to do.

Ed Ludlow (2:54)

She makes it seem like this is the investors pushing to do a private market round right that they want to do it. Just catch us up on where OpenAI is at with its journey to the public markets.

Mike Shepard (3:05)

Well, they have actually slowed their role, unlike Anthropic, which seems to be marching closer to an offering as soon as November. But OpenAI has taken a different track. They have decided to tap the brakes a little bit and wait until at least next year before they go public. But what was interesting in her comments there, Ed, is that also this whole question of compute, they want to make sure that they have enough infrastructure in place so that perhaps they are ready on both sides, not just with investors, but also with their ability to deliver and to keep developing the models that not only are investors, but customers out there are going to be looking for. So interesting comments from her is saying that, look, there's demand on the investor side, but also demand on their own internal side for funding to be able to sustain all the infrastructure that they will need.

Ed Ludlow (3:55)

That's on the financial news cycle side. Actually, in technology, we continue to get the release of models. And one of them is from NVIDIA Bank's Reflection, which has released an open weight model. What do we need to know?

Mike Shepard (4:08)

Well, they just put out this new model, Ed, called Beam. And it is something that they say competes with some of the best open offerings from rivals in China, including GLM 5.2 from ZAI, which is one of the rising stars in China. And of course, China's models lag behind the US at the very cutting edge, the frontier. But they are gaining ground thanks to the adaptability and the affordability of these open weight models. Not only ZAI, but others that we have talked about on this program before, like Moonshot, DeepSeek and Minimax. And Reflection wants to get into the game here of open weight in the US.