OpenAI New Financing at $1.5 TRILLION Valuation to Delay IPO - OpenAI is DEAD, but not yet...

Eli the Computer Guy (0:00)

Apparently, this is true. Coming from Forbes, OpenAI reportedly weighs new funding round at the valuation of up to $1.5 trillion. And I know what some of my viewers are gonna say, oh, what do you think about this, Eli? You're always saying OpenAI is dead. And now as a startup company, as a private company, they are looking at taking on even more investment to push them to $1.5 trillion on the private market. This is not IPOing. This is not a public market. This is still private. And I know some of the viewers, oh yeah, oh yeah. Well, how dead is OpenAI now?

About as dead as WeWork was when they were trying to IPO for $45 billion.

Anybody been following me long enough to remember when I was screaming about WeWork and everybody was calling me dumb back then? Anyway, yeah, so, so...

Apparently this is real.

I am informed this is reality. Don't matter how stupid it may be. So I just did a video a few days ago talking about Sam Altman. And so Sam Altman was saying that it didn't, it did not appear that OpenAI was going to IPO in 2026, because they were worried about security. And I've been talking about this whole IPO thing for a long time, right? Where Sam Altman wanted to pull the IPO into 2026, the CFO wanted to push the IPO well into 2027 And I've been having a lot of questions, especially about things like burn rate. And I do think this brings up that question, right? So they brought in so much money. They brought in so many billions of dollars. But remember, it cost them a lot of money simply to keep the lights on at this point in time for OpenAI. Plus, they have massive contracts in the line, right? Sam Altman signed the contract with Oracle for $300 billion, something like $50 billion a year in obligations. I do believe starts in 2027 So that is just an amount of money they have to pay. On top of all of the other money they have to pay. So one of the questions that I've been bringing up lately is essentially when will OpenAI just simply run out of runways? When we talk about runway, we're talking about is when start up companies get investment, they get enough investment to last them a particular period of time. And the idea is that is their runway, that if they don't get more money or if they don't make their company profitable that they're not going to get off the ground and they're going to smack into the trees. That's one of the big things with any start up company, is their whole question basically is how long is runway? Because going out and seeking investment money, that takes time and energy from the founders where they can't be focused on the business. And so there's this whole thing. So normally when you're looking at runways, you're looking anywhere between a 12 month runway to a 24 month runway, one to two years. Basically the founders go out, they get as much money as possible, and then that should last them for a period of time. But then they have to go out and they start having to beg for money again before their runway runs out, right? So if they have a runway of 12 months, basically what that means is they can hyper focus on their business for about nine, about nine, and then the final three months, they are kissing a lot of ass to try to get enough money to keep them going. And so one of the things I've had a question about OpenAI is we have heard from Sam Altman that anything under a $1 trillion valuation is a non-starter. This actually comes from him, non-starter. Which if you look at their expenses, if you look at their burn rate, basically what that seems to mean is that they get less than a $1 trillion valuation on their IPO, then the company fails. But the thing, remember, with that IPO, not only is it an amount of money, but it has to come in in a timely manner, right? And so they have to get to a trillion dollars, but they also have to get the money. And so one of the questions that I've been asking is, well, if they have to have a trillion dollar valuation because they're burning so much money, and then you push the IPO six months, do they have enough money to last that six months until they get to the IPO, and hopefully they get the boost afterwards? And that's one of my big questions. So apparently, what it looks like is, they're pushing the IPO, but then somehow, somehow some very, very dumb, I would consider a very dumb money, is going to give them enough money to keep going. And this is just, this is just, oh lordy. OpenAI is discussing raising money as part of a new funding round which will value the company at as much as $1.5 trillion according to multiple reports early on Wednesday, days after the company's CEO announced his company will not go public in 2026 Citing unnamed sources familiar with the matter, the Times Dealbook newsletter reported that investors had recently approached the Czech UBT maker with an offer to invest in the company at a $1.2 trillion valuation. OpenAI, however, is seeking a much higher $1.5 trillion valuation, which is more than double the $730 billion it was valued at during its last funding round. Now, that's curious. I thought they were valued at $840 billion, but I don't know. These numbers are just getting stupid. One of the things I do want you to think about, though, with all these rounds is, remember, investors buy low, sell high. And when I say sell high, they don't want to sell a little high. They don't want to buy stock for a buck and then sell it for a buck-oh-five. They want to buy it, sell it, buy stock for a buck, and then sell it for two bucks, or preferably 10 bucks. So one of the things that also gets very concerned, and I'm concerned about this, and this is where I get very concerned with all these AI companies, right? Not the AI stack, the technology, fine enough. It's these companies. These evaluations are just getting so bat-crap crazy.