OpenAI is in early discussions to raise new funding at a valuation of $100 billion or more

If the funding round proceeds as planned, it would make the artificial intelligence favorite the second most valuable startup in the U.S., only behind Elon Musk’s Space Exploration Technologies Corp., according to CBInsights data.

OpenAI has declined to comment on the matter.

The company is also set to complete a separate tender offer early in January, which would allow employees to sell shares at a valuation of $86 billion, as previously reported by Bloomberg. This deal, led by Thrive Capital, saw more investor demand than availability.

OpenAI’s soaring valuation aligns with the AI frenzy that began a year ago following the launch of ChatGPT, a chatbot capable of composing eerily human-like sentences and even poetry in response to simple prompts. The company has become Silicon Valley’s most sought-after startup, and a new appreciation for the promise of AI has shifted the tech industry landscape in just a few months.

Furthermore, OpenAI has been in talks to raise funds for a new chip company with Abu Dhabi-based G42. The startup has discussed raising between $8 billion and $10 billion from G42. It’s unclear if the chip company and the broader funding efforts are related.

OpenAI CEO Sam Altman had been seeking capital for the project, codenamed Tigris, aiming to produce semiconductors that can compete with those from Nvidia Corp., which currently dominates the AI tasks market.

In October, G42 announced a partnership with OpenAI “to deliver cutting-edge artificial intelligence solutions to the UAE and regional markets.” Financial details were not provided. Founded in 2018, the firm is led by Sheikh Tahnoon bin Zayed Al Nahyan, the UAE’s national security advisor and chairman of the Abu Dhabi Investment Authority.

OpenAI’s future briefly seemed uncertain after its board abruptly dismissed Altman earlier last month. At the time, some investors considered writing down their stakes to zero. However, after five days of leadership turmoil, Altman returned, and a new board was appointed. The company has aimed to signal to clients that it is refocusing on its products after the upheaval.