OpenAI is closing in on one of the largest private fundraising rounds in tech history.
It's absolutely massive.
Welcome to the podcast.
I'm your host, Jaden Schaefer.
Today we're talking about some reports coming out of Bloomberg in relation to a 100 billion round of funding that OpenAI is going to be doing, putting them at an 850 billion valuation.
This is absolutely astronomical.
And also there's a bunch of awkward moments happening in India between Sam Altman and Anthropic CEO Dario Amadeo, who've been in this death feud for the last, I would say, couple months, based off of Anthropic putting out these kind of attack ads at the Super Bowl on OpenAI and Sam Altman firing back.
And then they had a very awkward moment where they're supposed to be holding hands in India.
Things did not go according to plan.
I want to break that down and also talk about some interesting analytics coming out of OpenAI in regards to their users.
So It's basically a whole bunch of AI news for OpenAI today.
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Okay, so according to Bloomberg, ChatGPT is getting really close to a deal.
They're going to be raising $100 billion.
Like I mentioned, the valuation is going to be over $850 billion.
And all of these numbers are going to top some of the earlier expectations.
People thought it was going to be about $800 billion.
$30 billion.
Now it's gonna be 150.
I think this really shows that there is a ton of investor appetite for even the biggest of these AI frontier models, which makes it feel like this quote unquote AI bubble we've heard talked about so frequently and so often just doesn't feel as close, like these companies just keep raising more and more money.
There's a lot of demand for this.
The costs are rising.
I think the competition is increasing.
But as Bloomberg says, OpenAI's pre-money valuation is still going to be about $730 billion.
So I think that right now comes at a really important moment.
OpenAI is burning through insane amounts of money and they're not slowing down in any way, shape or form.
They're scaling up their infrastructure.
They're training new models.
They're expanding globally all around the world.
We have tons of reports out of, I think, Anthropic, OpenAI, Perplexity.
They're all aggressively expanding into India right now.
And I think even while they're moving perhaps closer to profitability, there's come.
In some recent weeks they confirmed that they've started testing ads inside of ChatGPT for the free tier.
So this is a move that might unlock even more revenue streams, but also it risks a bit of user backlash if they don't execute this correctly on x when they first kind of made the announcement.
There's a lot of people complaining about it.
At the end of the day uh, i think it's, it's not shocking.
I mean, these things cost money, so if they're going to charge money for them, i'm not or like, throw ads on there, i'm not surprised.
What i will say is i was surprised that their eight dollar a month tier, which they rolled out, does have ads embedded.
Uh, i mean, i I would feel like they have a 20 a month tier which I personally pay for.
And I'm like, yeah, that's fine.
I don't want to see ads because I'm paying 20 bucks a month.
And then when they had the $8 a month tier and they're like, and we will have ads there.
I was like, oof, like maybe rate limit people more.
Maybe don't give them everything, but like ads on that, just felt I don't know it feels bad to pay 8.
And if that's you, if you're on the 8 a month tier and you don't want ads, you could just get AI Box.
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But in any case, I think right now they have a lot of momentum But there's a whole bunch of I think.
The early tranches of all of this funding are expected to come from basically everyone you'd expect the money to come from.
Amazon is said to be in talks to put in about 50 billion dollars.
SoftBank is apparently preparing to put in about 30 billion dollars.
And NVIDIA might invest up to 20 billion.
Microsoft also is putting money in.
We don't have an exact number.
And I think there's some other venture firms.
There's also some sovereign wealth funds that are expected to join later.
And maybe, like there's going to be another round after this that they're like already working on, which might even push the entire valuation a little bit higher.
Or maybe they'll just say, you know, they'll take the money later, but then tack it onto this round.
And so saying you know, instead of just being like we raised 100 billion, they'll be like we raised 120 or 30 or 50.
So, I mean, these things could balloon.
We've seen this happen for other companies like Anthropic as well in recent months.
I think right now, all of the fundraising momentum is coming at a time where there's definitely a lot of competition and there's also a backdrop of a really high-profile gathering in New Delhi.
There's the India AI Impact Summit.
OpenAI's CEO, Sam Altman, and also Anthropic CEO Dario Amodeo.
They had a really awkward moment at this whole conference.
Basically, they're up there with India's prime minister And he was kind of encouraging everyone to like he's like.
All right, everyone.
Let's all hold hands in a show of unity.
And so there's this big line of people and everyone's holding hands and raising their hands above their head.
But Sam Altman and Dario Amadeo were standing right next to each other.
They both raised their hand, but they were not going to hold hands.
Everyone else was holding hands.
They were not.
I think for a lot of people, they're like, OK, this rivalry is definitely... visible.
These are not friends, which is kind of funny because you'd think, in front of the president of a country where you're kind of going there to I don't know, to try to woo them and make them really like your company not listening to them.
I don't know.
It's pretty funny to me.
So, in any case, this whole rivalry that OpenAI and Anthropic have had has definitely gotten worse in recent months.
Anthropic did a whole bunch of Super Bowl ads, basically attacking OpenAI, adding ads into their uh their cheaper chat gpt subscriptions and they said like look anthropics clod is never going to have ads sam altman uh had this like huge essay where he was basically calling anthropics um you know how they were showing this basically being like super misleading and he was saying that opening i was not going to implement ads in a way that you know, it's like, we're not going to undermine your user trust.
It was kind of funny because he also, you know, said that this I can't get this quote out of my head, but he's like Anthropic makes AI for rich people.
We make AI for like the whole world.
And anyways, it's kind of like this like moral superiority thing.
It's like OK bro, you also made a nonprofit and then change it to a for profit and made gobsmacking amounts of money.
But like, Whatever.
They make AI for rich people because I think a lot of developers use Anthropix AI.
Anyways, it's all funny.
It's a lot of virtue signaling.
But I think, despite all of this competition that's going on right now, both of them are aggressively expanding in India right now.
We see that, as you know, as they're both making trips there and they're both opening a lot of new offices and putting a lot of work into that area.
I think it's one of the fastest growing AI markets in the world opening.
I said that they're going to open new offices in Mumbai and And they're also going to partner with Tata Group to secure about 100 megawatts of AI compute capacity.
So they're actually building the data centers and they're getting the compute capacity right there in India for a lot of what they're working on.
So they're making a lot of investments in India specifically.
And they also said that they're going to distribute ChatGPT Enterprise through Tata Consulting Services.
Anthropic, on the other hand, has also opened their own indie offices and they partnered with Infosys to basically deploy their tools internally and externally.
OpenAI said that India right now is their second largest market.
They have more than 100 million weekly users.
They also said that young users are most of their growth.
About half of all AI, all of ChatGPT's messages in India come from users that are between 18 and 24.
And then they said 80% come from users under 30.
So basically, anyone in India under 30, that's 80% of ChatGPT's usage over there.
And then I think right now they said that work use cases are that are basically dominating India.
About 35 percent of Indian messages are related to professional tasks.
That's if you compare it to about 30 percent globally.
So India has a higher percentage of people using it for work.
And then coding in particular, they said is one of the biggest areas.
They said their coding assistant codex is used three times more frequently in India than the global average.
And they said that the weekly usage has quadrupled since they launched their Mac app about two weeks ago.
India users are also asking three times as many coding related questions as the median user worldwide, which is interesting.
Now, of course, there's a huge tech scene over there in India.
And the other thing that I'll say is Anthropic is quite.
It can be expensive for some of these types of coding tasks.
So maybe OpenAI is kind of gaining ground because of that.
I think, outside of work.
35 of Indian messages to ChatGBT are asking guidance, 40 are focusing on general information and another 20 are with you know, helping them write things.
So right now, to try to speed up the adoption, OpenAI has offered a under 5 subscription tier in India.
Now, I think this is kind of normal.
A lot of these companies will do like geographic based subscription tiers where you know the pricing like I can't get that price but someone in India could and they'll do it based off of a specific currency, kind of based off of the average salary or income in a specific area.
And so uh, By offering these kind of cheaper subscription tiers, I think it opens it up to a lot more users in India.
They also have some targeted ad campaigns.
They've signed some partnerships with Pine Labs Exego, Make My Trip food and grocery delivery company Eternal.
And they have a bunch of educational institutions that are trying to bring more tools to.
I think there's like 100000 students over the next six years that they're working with.
So they're putting a lot of energy and effort into expansion plans and, making you know, increasing their revenue.
We know that they may do an IPO very soon.
And so I think they're really putting making a really big push right now.
They're also if I mean, if you just look at opening I kind of deepening a lot of their global footprint.
A lot of the experiments are doing with monetization strategies like advertising.
And then of course, this 100 billion raise.
I think this just shows the scale of the investor conviction behind kind of some of these long term ambitions.
I think infrastructure costs are absolutely exploding right now.
And the competition is tightening like we see Anthropic gaining ground in certain areas.
Google Gemini most certainly is gaining a lot of ground.
And I think with all of that, and even with all of that, OpenAI is still positioning themselves not just kind of as like a model developer, but as a global AI platform.
And they're trying to show that they have the capital to match.
They're like, look, we have a ton of revenue.
And so I think they're making the correct investments into growing their, growing their company very quickly ahead of, you know, some of these massive rounds of funding and a potential IPO that we might see in the near future.
So absolutely fascinating time for OpenAI right now.
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