OpenAI's $121B Funding Round Explained  🔗 **Source:** [OpenAI's $121B Funding Round Explained](https://share.snipd.com/episode/849c7afc-8a42-4935-aecf-d13420897923) ## Highlights - **Huawei 950PR Threatens Nvidia In China** - Huawei's 950PR chip is positioned as a practical Nvidia alternative by improving CUDA compatibility and response times. - ByteDance and Alibaba plan orders and Huawei aims to ship 750,000 units this year with cheaper pricing than NVIDIA high-end cards. Transcript: Jaeden Schafer Their 950PR chip is getting a lot of traction and it is a serious competitor to NVIDIA's AI chips. They've been working on this for a while. We know China obviously has been working on this because they don't want to get left behind and the United States has a whole bunch of chip export controls. R reported last week that both ByteDance and Alibaba are planning to place orders and customer testing has apparently gone really well um Huawei right now they previously had kind Of their flagship Ascend 910c it was struggling to get any adoption from some of the big private sector tech companies Nvidia was still basically dominating everywhere there so I think The main complaint that it got was software compatibility. If your whole stack is built around NVIDIA's CUDA ecosystem, then switching is super, super painful. The 950 PR apparently is going straight after that. And I guess they're sort of addressing it. It's a lot more compatible with CUDA workflows, and the response time is a lot better. But by basically integrating with the software that Nvidia uses they're able to get into that same ecosystem without people having to completely rebuild everything from scratch So pricing on it is really interesting too the standard version with DDR memory it comes in around $6,900 per card the premium HBM version is about $9,600 for comparison NVIDIA's high-end AI chip sells for significantly more than that. So I think that there's a big cost advantage if performance is competitive enough. Huawei is planning to ship around 750,000 units in this year. They have mass production starting next month and full shipments in the second half of the year. ([Time 0:01:50](https://share.snipd.com/snip/f589d96f-8811-44fd-b20c-f802243b91d5)) - **Software Compatibility Lowers Switching Cost** - By matching CUDA workflows and lowering latency, Huawei reduces the switching cost for firms entrenched in Nvidia stacks. - The 950PR starts at ~$6,900 (DDR) vs pricier Nvidia high-end chips, creating a strong cost-performance incentive. Transcript: Jaeden Schafer If your whole stack is built around NVIDIA's CUDA ecosystem, then switching is super, super painful. The 950 PR apparently is going straight after that. And I guess they're sort of addressing it. It's a lot more compatible with CUDA workflows, and the response time is a lot better. But by basically integrating with the software that Nvidia uses they're able to get into that same ecosystem without people having to completely rebuild everything from scratch So pricing on it is really interesting too the standard version with DDR memory it comes in around $6,900 per card the premium HBM version is about $9,600 for comparison NVIDIA's high-end AI chip sells for significantly more than that. So I think that there's a big cost advantage if performance is competitive enough. Huawei is planning to ship around 750,000 units in this year. They have mass production starting next month and full shipments in the second half of the year. ([Time 0:02:27](https://share.snipd.com/snip/17ce14be-6ad0-4b9d-9760-7662910695c3)) - **Anthropic Accidentally Published Claude Code** - Jaeden recounts Anthropic accidentally publishing ~500,000 lines of Claude Code to an NPM registry due to a packaging/debug error. - The leak exposed feature flags and unreleased capabilities like persistent assistant mode and remote control. Transcript: Jaeden Schafer And so I think it's going to be interesting to see what plays out there. Levels but also I mean sucks for them basically the last a couple days ago Anthropic accidentally published the entire source code of Claude Code to a public NPM registry about 500,000 Lines of code it was about 1900 files a lot of people were impressed by just how big robust I mean no shocker but like this is basically their flagship core product that has kept their whole Company alive but there was a debug file that was meant for internal use, but it got bundled into the updates and somehow got pushed out into the public package registry. Anthropic says that no customer data or credentials were exposed. I mean, that's not, I don't think what they're really super concerned about. It was basically a packaging error. They said it was caused by human error, not a security breach. And also, I think when they say human error, they're like, don't worry, like, Cloud Code didn't accidentally code itself into an issue. It was like it was a human. Maybe it was. Maybe it wasn't. I don't know. I think that that is something that they're trying to put a big distinction on as well, though, is also that it's like, look, something happened to our end. When they say human error, that could also mean human using AI. But basically what they're saying is this wasn't hacked, right? It wasn't like, someone hacked the pipeline to do this. I think what's interesting is that the leaked code contained a bunch of the feature flags for capabilities that haven't even shipped yet, right? So people were basically dissecting the code. And they're like, there's a lot of really cool threads I saw in X where they're like, look, if you're using cloud code or any of the cloud tools, like you should be using them better because There's actually all these features in here. You can kind of understand it better by reading the code. So that was very helpful. I saw tons of really useful threads based on that. But also we're seeing a bunch of features in there that haven't been announced or shipped yet. And apparently there is a system for Cloud to review its own past sessions and transfer learnings across conversations. So there's this, it's called persistent assistant mode that lets it keep working in the background when you're not actually doing anything. There is remote control capabilities so you can manage Claude from your phone or another browser. And there's kind of like, we've seen some of those features before, but not in the way that they've been putting them out. And especially the persistent assistant, oh my gosh, I would love that if between, even sometimes I'm talking to co-work and then I go to code and those two do not talk to each other. And so I'm like telling them different issues and sometimes they cause issues. I was having a problem where like Claude Code wasn't, I would have Claude Cowork update something in my GitHub and then Claude Code, I would have an update, but it wasn't pulling it fresh. It was basically just updating locally and from the files it had on my computer and pushing. So it was overwriting what Cowork had just done so that bugs were coming back. ([Time 0:03:49](https://share.snipd.com/snip/f17b0c46-64a3-4729-ae93-05d03d8e4de4)) - **Leak Revealed Ambitious Persistent Assistant** - The leaked Claude Code revealed features not yet shipped, including a persistent assistant that reviews past sessions and transfers learnings. - These findings let developers and users dissect upcoming integrations between Claude Cowork and Claude Code. Transcript: Jaeden Schafer I think what's interesting is that the leaked code contained a bunch of the feature flags for capabilities that haven't even shipped yet, right? So people were basically dissecting the code. And they're like, there's a lot of really cool threads I saw in X where they're like, look, if you're using cloud code or any of the cloud tools, like you should be using them better because There's actually all these features in here. You can kind of understand it better by reading the code. So that was very helpful. I saw tons of really useful threads based on that. But also we're seeing a bunch of features in there that haven't been announced or shipped yet. And apparently there is a system for Cloud to review its own past sessions and transfer learnings across conversations. So there's this, it's called persistent assistant mode that lets it keep working in the background when you're not actually doing anything. There is remote control capabilities so you can manage Claude from your phone or another browser. And there's kind of like, we've seen some of those features before, but not in the way that they've been putting them out. ([Time 0:05:10](https://share.snipd.com/snip/c0461be9-d0df-4a8c-ac5d-f39fe517fe73)) - **OpenAI Raises Record $121B Round** - OpenAI closed a record $121B private round at an $852B post-money valuation dominated by strategic tech investors. - Amazon pledged ~$50B (with ~$35B contingent on IPO/AGI milestones), NVIDIA and SoftBank each committed $30B. Transcript: Jaeden Schafer But if you thought that was a big deal, OpenAI found a way to top it by closing a $121 billion round at $852 billion valuation. This is massive. These valuations just keep rising. And this is all, you know, pre-IPO for OpenAI. This was a post-money valuation, the $852 billion. And I think if you want to put that into perspective, this is basically the largest private financing round the tech industry has ever seen. Open AI is now valued higher than most public companies on the planet. And so I think, I mean, this is absolutely wild. But as far as who's actually putting money into this, that is, I think, maybe the bigger story that's interesting. This is kind of the circular money of Silicon Valley AI that's been going on for a long time. But Amazon has committed to put about $50 billion into this, which is basically the single largest chunk. NVIDIA and SoftBank each are putting in $30 billion. The round was co-led by SoftBank along with Andresen Horwitz, DE Shaw Ventures, MGX, TPG, and T. Rowe Price microsoft is also participating in this and i think for the first time open ai extended the participation to retail investors through some bank channels and they raised About three billion dollars from individual investors which is interesting because that's kind of like what the ipo will be in the future but it's like a pre-ipo uh and they're kind Of getting some retail in there. I wish they had told me about it, but, you know, I guess I wasn't on the list of retail. When they say retail also, and they say they raised $3 billion from individual investors, I feel like the retail investors were probably very rich retail investors and not random people. So I think there's a really big detail in all of this, though, is and that's Amazon's commitment. 35 billion of their 50 billion dollars is contingent. It only goes through if OpenAI either goes public or reaches the milestones of AGI. So basically, I just a really interesting clause. It tells you that Amazon is making a bet. It's also a structured bet, right? There's some real conditions attached. They're not just handing over $50 billion unconditionally. This is so fascinating when we see these like funding rounds, we've seen NVIDIA actually do some similar things as well, where it was kind of like NVIDIA is like, hey, we'll give you this Money, but it's contingent on you doing XYZ. So I think like companies like Anthropic and OpenAI, they're just raising so much money, and they're doing so much, but investors really want to make sure that, you know, big things Are happening and they're going to get their returns back because Amazon is a huge company, but $50 billion would definitely hurt them to lose. I think the revenue numbers are really interesting on this. OpenAI says that they're now generating about $2 billion a month. That's up from $13.1 billion for all of last year. So, right, that could be putting them on track in the next 12 months to make about $24 billion, which is, you know, significantly higher than the $13 billion from last year. It's a pretty steep growth. The company is still not profitable. They're burning cash at a massive rate. And so I think the funding is going directly into chips, Dana centers, and talent. There's a few things that I think are interesting. First, the valuation, $850, $852 billion is absolutely massive for a private company. That would basically make OpenAI roughly the seventh or eighth most valuable company in the world if it was public. The IPO is coming soon. I think there's a lot of buzz around that. ([Time 0:06:42](https://share.snipd.com/snip/82a10775-aa9e-482c-a7a6-c3cf3132cfac)) - **Funding Concentration Creates Strategic Dependencies** - The round's capital is highly concentrated: Amazon, NVIDIA, and SoftBank supply the majority, making investments strategically aligned but less diversified. - These backers have dependencies: AWS needs models, NVIDIA needs customers, SoftBank doubles down on AI. Transcript: Jaeden Schafer This is kind of the circular money of Silicon Valley AI that's been going on for a long time. But Amazon has committed to put about $50 billion into this, which is basically the single largest chunk. NVIDIA and SoftBank each are putting in $30 billion. The round was co-led by SoftBank along with Andresen Horwitz, DE Shaw Ventures, MGX, TPG, and T. Rowe Price microsoft is also participating in this and i think for the first time open ai extended the participation to retail investors through some bank channels and they raised About three billion dollars from individual investors which is interesting because that's kind of like what the ipo will be in the future but it's like a pre-ipo uh and they're kind Of getting some retail in there. I wish they had told me about it, but, you know, I guess I wasn't on the list of retail. When they say retail also, and they say they raised $3 billion from individual investors, I feel like the retail investors were probably very rich retail investors and not random people. So I think there's a really big detail in all of this, though, is and that's Amazon's commitment. 35 billion of their 50 billion dollars is contingent. It only goes through if OpenAI either goes public or reaches the milestones of AGI. So basically, I just a really interesting clause. It tells you that Amazon is making a bet. It's also a structured bet, right? There's some real conditions attached. They're not just handing over $50 billion unconditionally. This is so fascinating when we see these like funding rounds, we've seen NVIDIA actually do some similar things as well, where it was kind of like NVIDIA is like, hey, we'll give you this Money, but it's contingent on you doing XYZ. So I think like companies like Anthropic and OpenAI, they're just raising so much money, and they're doing so much, but investors really want to make sure that, you know, big things Are happening and they're going to get their returns back because Amazon is a huge company, but $50 billion would definitely hurt them to lose. I think the revenue numbers are really interesting on this. OpenAI says that they're now generating about $2 billion a month. That's up from $13.1 billion for all of last year. So, right, that could be putting them on track in the next 12 months to make about $24 billion, which is, you know, significantly higher than the $13 billion from last year. It's a pretty steep growth. The company is still not profitable. They're burning cash at a massive rate. And so I think the funding is going directly into chips, Dana centers, and talent. There's a few things that I think are interesting. First, the valuation, $850, $852 billion is absolutely massive for a private company. That would basically make OpenAI roughly the seventh or eighth most valuable company in the world if it was public. The IPO is coming soon. I think there's a lot of buzz around that. I think that it is becoming very clear that OpenAI is going to go public. The retail investor participation feels like a step in that direction, even though, you know, I mean, it's they raised $122 billion, only $3 billion was from retail. But I think that's kind of the direction they're going. And also, you can see clearly, you know, I think there's companies like Stripe, where everyone's like, oh, Stripe's gonna go IPO soon. And then they just kind of like never do. And it keeps going and going and stripe never ipos i think with open ai like they basically have to uh amazon there doesn't want that you know stripe situation to happen and they're like We're only going to give you your last 15 billion dollars in this 50 billion dollars if you go public like you you know it's contingent you have to do it so i think they're definitely getting Pushed in that direction i think they want. I think the other thing that's interesting is the concentration of the investment. When Amazon, NVIDIA, and SoftBank are collectively putting $110 billion of the $122 billion total, that's, I mean, it's not very diversified investor base. It's basically strategic partners. They have deep interests in AI infrastructure. Amazon needs AI models for AWS. NVIDIA needs AI companies buying their chips. SoftBank has bet its entire strategy on AI. So I think all of this money comes with alignment, but also comes with a lot of dependencies. ([Time 0:07:22](https://share.snipd.com/snip/029e61ae-ce47-482a-9a9f-dd28e0935e1c)) - **Scrutinize Contingent Funding Clauses** - Evaluate conditional funding terms closely because large commitments often hinge on milestones like IPO or AGI achievements. - Jaeden highlights Amazon's $35B contingency as a structured bet rather than unconditional capital. Transcript: Jaeden Schafer I wish they had told me about it, but, you know, I guess I wasn't on the list of retail. When they say retail also, and they say they raised $3 billion from individual investors, I feel like the retail investors were probably very rich retail investors and not random people. So I think there's a really big detail in all of this, though, is and that's Amazon's commitment. 35 billion of their 50 billion dollars is contingent. It only goes through if OpenAI either goes public or reaches the milestones of AGI. So basically, I just a really interesting clause. It tells you that Amazon is making a bet. It's also a structured bet, right? There's some real conditions attached. They're not just handing over $50 billion unconditionally. ([Time 0:08:06](https://share.snipd.com/snip/f61a1b62-a779-452c-8efa-6eef0f53c985)) - **Revenue Growth Versus Massive Burn** - OpenAI claims ~$2B monthly revenue and rapid growth but remains unprofitable and cash-intensive, funding chips, data centers, and talent. - Raising $122B raises expectations that the company must deliver outsized results or face scrutiny. Transcript: Jaeden Schafer I think the revenue numbers are really interesting on this. OpenAI says that they're now generating about $2 billion a month. That's up from $13.1 billion for all of last year. So, right, that could be putting them on track in the next 12 months to make about $24 billion, which is, you know, significantly higher than the $13 billion from last year. It's a pretty steep growth. The company is still not profitable. They're burning cash at a massive rate. And so I think the funding is going directly into chips, Dana centers, and talent. There's a few things that I think are interesting. First, the valuation, $850, $852 billion is absolutely massive for a private company. That would basically make OpenAI roughly the seventh or eighth most valuable company in the world if it was public. The IPO is coming soon. I think there's a lot of buzz around that. I think that it is becoming very clear that OpenAI is going to go public. The retail investor participation feels like a step in that direction, even though, you know, I mean, it's they raised $122 billion, only $3 billion was from retail. But I think that's kind of the direction they're going. And also, you can see clearly, you know, I think there's companies like Stripe, where everyone's like, oh, Stripe's gonna go IPO soon. And then they just kind of like never do. And it keeps going and going and stripe never ipos i think with open ai like they basically have to uh amazon there doesn't want that you know stripe situation to happen and they're like We're only going to give you your last 15 billion dollars in this 50 billion dollars if you go public like you you know it's contingent you have to do it so i think they're definitely getting Pushed in that direction i think they want. I think the other thing that's interesting is the concentration of the investment. When Amazon, NVIDIA, and SoftBank are collectively putting $110 billion of the $122 billion total, that's, I mean, it's not very diversified investor base. It's basically strategic partners. They have deep interests in AI infrastructure. Amazon needs AI models for AWS. NVIDIA needs AI companies buying their chips. SoftBank has bet its entire strategy on AI. So I think all of this money comes with alignment, but also comes with a lot of dependencies. And then the thing that I keep coming back to is just the sheer scale of capital flowing into AI right now. OpenAI alone is raising $122 billion, but NVIDIA is investing $2 billion in Marvel, another company. AI startups now are accounting for 41% of all venture dollars last year. The total investment in AI infrastructure, I think, is approaching levels that we've never seen in the tech sector. And so I think the question isn't really whether this money is going to build impressive things. I definitely think it will. I think the question is more of, you know, can the returns justify the investment at this scale? You know, or whether we're kind of building ahead of where demand actually is. Like, OpenAI is $2 billion a month in revenue. I think that's phenomenal. That is real demand. But profitability still isn't there. ([Time 0:09:13](https://share.snipd.com/snip/f00a1f23-e8fd-44ea-933d-1d534205bbae)) - **Expect Investors To Shape Company Timelines** - Treat strategic investment as alignment plus dependency; expect investors to push for outcomes like IPOs. - Jaeden warns Amazon's conditionality may pressure OpenAI toward a public offering to unlock funds. Transcript: Jaeden Schafer But I think that's kind of the direction they're going. And also, you can see clearly, you know, I think there's companies like Stripe, where everyone's like, oh, Stripe's gonna go IPO soon. And then they just kind of like never do. And it keeps going and going and stripe never ipos i think with open ai like they basically have to uh amazon there doesn't want that you know stripe situation to happen and they're like We're only going to give you your last 15 billion dollars in this 50 billion dollars if you go public like you you know it's contingent you have to do it so i think they're definitely getting Pushed in that direction i think they want. I think the other thing that's interesting is the concentration of the investment. When Amazon, NVIDIA, and SoftBank are collectively putting $110 billion of the $122 billion total, that's, I mean, it's not very diversified investor base. It's basically strategic partners. They have deep interests in AI infrastructure. Amazon needs AI models for AWS. ([Time 0:10:15](https://share.snipd.com/snip/d2152ebc-43a0-4f94-aa40-a4a7960c7eec)) - **AI Funding Is Reaching Unprecedented Scale** - The scale of capital into AI is unprecedented, with AI startups taking 41% of venture dollars and infrastructure spending soaring. - This creates questions about whether demand and returns can justify the massive upfront investment. Transcript: Jaeden Schafer OpenAI alone is raising $122 billion, but NVIDIA is investing $2 billion in Marvel, another company. AI startups now are accounting for 41% of all venture dollars last year. The total investment in AI infrastructure, I think, is approaching levels that we've never seen in the tech sector. And so I think the question isn't really whether this money is going to build impressive things. I definitely think it will. I think the question is more of, you know, can the returns justify the investment at this scale? You know, or whether we're kind of building ahead of where demand actually is. Like, OpenAI is $2 billion a month in revenue. I think that's phenomenal. That is real demand. But profitability still isn't there. And when you raise $122 billion, the expectation for what you deliver is enormous. Sam Altman and the team essentially are betting that they can build AGI or something close to it before the money runs out. And it's also very hard to determine what we actually classify as AGI. However, I will say Anthropic internally, according to leaks and reports, says that they expect to achieve AGI within the next six to 12 months. I have no idea if that will happen, but the rate of improvement that I've been seeing with Claude Code and Claude Cowork and what I've been able to do there, I'm really excited for where The future goes because I do feel like this is getting significantly better. ([Time 0:11:20](https://share.snipd.com/snip/3ea1b6c9-351d-4103-bfa2-63d85ddfc6be))