OpenAI is closing in on the largest private financing in tech history, with the first phase of a funding round expected to exceed $100 billion and value the ChatGPT maker at more than $850 billion, Bloomberg reported February 19. The round comes less than a year after OpenAI raised $40 billion, previously the largest private tech raise on record.
Strategic investors are leading the initial tranche with commitments approaching $100 billion from four corporations alone. Amazon is in talks to invest up to $50 billion, SoftBank approximately $30 billion, and Nvidia between $20-30 billion, with Microsoft also participating. Allocations are expected to finalize by the end of February 2026, followed by a second phase open to venture capital firms, sovereign wealth funds, and other institutional investors that could push the total even higher.
The company's pre-money valuation remains at $730 billion, with the new capital bringing the post-money valuation to $850 billion—$20 billion higher than initially anticipated. This would make OpenAI more valuable than all but a handful of S&P 500 companies while remaining private.
Infrastructure Spending Drives Capital Needs
The massive capital raise supports OpenAI's plans to spend trillions of dollars on AI infrastructure over the coming years. CEO Sam Altman has stated the company faces enormous costs for training and running advanced AI models, requiring vast computing power, high-end chips, and large-scale data centers.
Despite generating an estimated $12 billion in annual recurring revenue from ChatGPT Plus subscriptions and enterprise contracts, OpenAI continues burning cash and doesn't expect profitability until at least 2029. The company recently began testing advertisements in ChatGPT for free users to diversify revenue streams, though this risks alienating users accustomed to an ad-free experience.
Amazon's participation includes plans to expand OpenAI's use of Amazon Web Services and Trainium-based AI servers, strengthening ties between the companies. This comes despite Amazon's existing $8 billion investment in Anthropic and recent $11 billion data center campus in Indiana dedicated exclusively to running Anthropic's Claude models.
Deal Structure and Global Expansion
The funding will arrive in installments throughout 2026 rather than as a single lump sum, aligning capital delivery with OpenAI's expanding infrastructure buildout. SoftBank shares rose 4% in Tokyo trading following news of the financing discussions.
OpenAI is simultaneously expanding capacity outside the United States through structured partnerships. The company announced plans to work with India's Tata Group and Tata Consultancy Services to develop AI-ready data center capacity starting with 100 megawatts and potentially scaling to one gigawatt, making OpenAI the first customer of TCS's HyperVault data center business.
Market Implications and IPO Timing
Multiple reports indicate OpenAI could pursue an initial public offering as early as late 2026, with a confidential filing expected in Q2. The potential IPO comes as competition with Anthropic intensifies, with both companies racing to develop more powerful AI systems and capture the same pool of enterprise customers.
The unprecedented funding round signals sustained investor confidence in AI's transformative potential despite questions about when massive capital investments will translate into profitability. Microsoft, Nvidia, and Amazon's participation further cements their positions as critical infrastructure partners to the world's most valuable startup, ensuring continued access to the models and technology powering the next generation of enterprise software.
