Tech & AI
OpenAI speeds up fundraising ahead of Anthropic's expected market debut
OpenAI is rushing to secure investor commitments before rival Anthropic's expected stock market debut, according to reports. The contest could shape how investors value AI developers.
Quick Read
- OpenAI is racing to raise money before Anthropic's expected stock market debut, according to reports.
- Reports said the rival AI labs increasingly compete for the same pool of investors.
- SoftBank, MGX and other existing OpenAI backers are in talks to join the round, though no deal is confirmed.
- Microsoft and Alphabet report quarterly results on Oct. 28, the same day as the Fed's rate decision.
What is OpenAI doing?
OpenAI is trying to lock in investor commitments quickly, according to reports. The ChatGPT maker wants the money in place before rival Anthropic's expected stock market debut.
Why it matters: Reports put that debut in mid-November. It would be an IPO, a company's opening sale of shares to the public. Reports described the pace of OpenAI's raise as unusually fast. No final terms have been announced.
Why is OpenAI moving so fast?
Reports said the rival labs increasingly compete for money from a similar group of investors. Raising early could let OpenAI secure commitments before Anthropic's shares draw on that same demand.
OpenAI also wants to make the most of its recent revenue growth after launching new models, the reports said. SoftBank, Abu Dhabi-based MGX and other existing backers are in talks to join the round. Talks may not end in commitments, and no deal has been confirmed.
How did tech stocks trade on Monday?
Technology shares led on Monday, Oct. 19. The Nasdaq-100 gained 1.2%, while the S&P 500 rose 0.4%. The technology sector fund gained 1.4%.
Microsoft (Nasdaq: MSFT) rose 0.8% and Alphabet's (Nasdaq: GOOG) Class A shares gained 1.1%. The reports did not tie these moves to the fundraising news.
What comes next?
What’s next: Microsoft and Alphabet report quarterly results on Oct. 28. The Federal Reserve announces its interest-rate decision the same day at 2 p.m. ET.
The bigger open question is whether investors have room for large deals from both labs in quick succession. Anthropic's listing timeline comes from reports and could still shift.
For readers
What it could mean for you: People whose 401(k) or IRA holds an S&P 500 or total-market index fund already own large listed tech companies such as Microsoft and Alphabet. OpenAI and Anthropic are private, so those funds do not hold them today. Even so, the price private investors pay for OpenAI, and the reception Anthropic's shares get, could affect how markets value AI-linked companies more broadly. That could reach index funds through their biggest tech holdings, which carry heavy weight in those funds.
Questions and answers
Why is OpenAI raising money before Anthropic's IPO?
Reports said the rival AI labs increasingly draw on a similar group of investors. Moving early could let OpenAI secure commitments before Anthropic's share sale competes for the same money.
When is Anthropic expected to go public?
Reports put Anthropic's expected stock market debut in mid-November. The company has not confirmed a date in the material available, and the timing could change.
Who is investing in OpenAI's new funding round?
SoftBank, Abu Dhabi-based MGX and other existing OpenAI backers are in talks to join, according to reports. No final commitments have been announced.
Do index funds own OpenAI or Anthropic?
No. Both companies are private, so S&P 500 and total-market index funds do not hold them. Those funds do own listed tech companies such as Microsoft and Alphabet.
The numbers
| Alphabet (GOOG) price | $340.16 |
|---|---|
| Alphabet (GOOG) change | +0.96% |
| Alphabet (GOOG) market value | $1.9 trillion |
| Alphabet (GOOG) 52-week high | $399.04 |
| Alphabet (GOOGL) price | $344.18 |
| Alphabet (GOOGL) change | +1.05% |
| Alphabet (GOOGL) market value | $2 trillion |
| Alphabet (GOOGL) 52-week high | $402.62 |
| S&P 500 change | +0.41% |
| 10-year Treasury yield | 5.15% |
Monday’s close
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Not investment advice.
