OpenAI Raises $110 Billion Led by Amazon, Nvidia and SoftBank, Extending A.I. Boom

[Mr. Sparkle]

Source: NY Times

OpenAI said on Friday that it had raised $110 billion from investors to pay for its continued growth and to fuel the development of artificial intelligence, valuing the company at $730 billion. Amazon, a new investor in OpenAI, is pouring $50 billion into the artificial intelligence start-up. The Japanese conglomerate SoftBank and the chipmaker Nvidia, which have previously invested in OpenAI, each invested $30 billion in the new funding round, OpenAI said.

With the deal, OpenAI, which was previously valued at $500 billion, cements its place as one of the most valuable private companies in the world alongside the rocket company SpaceX and ByteDance, the maker of TikTok. The new funding round also illustrates the circular deal making at the center of the A.I. boom. Companies like Nvidia, Amazon and Microsoft have invested huge sums in OpenAI, Anthropic and others. In exchange, those young companies purchase computing power from those same investors.

OpenAI isn’t done raising money. Sam Altman, the company’s chief executive, has been in discussions with various sovereign wealth funds in the Middle East about further investments. MGX, a United Arab Emirates investment firm, has previously invested in the company.

More than six years after its founders transformed their A.I. lab into a commercial company, OpenAI is still unprofitable and needs immense amounts of capital to pay for computing power, A.I. talent and other needs. The company pulled in revenues of $13 billion in 2025, but expects to spend $115 billion over the next four years.

Read more: https://www.nytimes.com/2026/02/27/business/openai-funding.html

[angrychair]

1. Nothing new here

This is just big AI connected companies passing around the same bucket of money like a pocket comb on picture day.

There is still no actual growth. No actual revenue. No actual, realistic, plan to be profitable.
This is theater to keep OpenAI afloat.
Microsoft has 50% stake in OpenAI and the financial stress on MS is starting to show

Eventually, Microsoft and these other companies will start to run into issues that they are not acting in the best financial interests of their stockholders.

[jfz9580m]

2. I would recommend Ed Zitron's latest piece

https://www.wheresyoured.at/on-nvidia-and-analyslop/

A few thoughts:

This is turning into a very involved and convoluted process! It turns out that it's pretty difficult to actually raise $100 billion.

This is a big problem, because OpenAI needs $655 billion in the next five years to pay all its bills, and loses billions of dollars a year.

If OpenAI is struggling to raise $100 billion today, I don't see how it's possible it survives. If you're to believe reports, OpenAI made $13.1 billion in revenue in 2025 on $8 billion of losses, but remember, my own reporting from last year said that OpenAI only made around $4.329 billion through September 2025 with $8.67 billion of inference costs alone.
It is kind of weird that nobody seems to acknowledge my reporting on this subject.
I do not see how OpenAI survives.

[FakeNoose]

3. Don't mistake this for profits - AI is completely unprofitable

They can't figure out how to make money off of AI, but they keep throwing more and more investment into it.

[gAI Obsessed]

4. New tulip schemes annually.

Crypto! AI!

[hunter]

5. Is it too big to fail yet?

It's fascinating to watch these guys accelerate when all the signs say they are on a dead end street.

Unfortunately for everyone, it all ends with Big Brother grabbing up all the infrastructure they've built for pennies on the dollar.

Maybe that was the plan from the beginning.

[pat_k]

6. These types of circular, incestuous deals were the harbinger of doom in the dot com era.

Take with whatever grains of salt you apply to all AI answers, but here is how Gemini summarizes:

Recent, in-depth reports from late 2025 and early 2026 indicate that the AI sector is heavily relying on circular financing—often called "AI incestuous deals"—where tech giants, chip manufacturers, and AI startups invest in each other and purchase each other's products, creating a self-reinforcing, potentially precarious, financial loop. Critics and market analysts worry this pattern mimics the 1999–2000 dot-com bubble, where companies inflated revenues by buying services from one another, setting the stage for a potential collapse.

Great illustration at this link:
https://economistwritingeveryday.com/2025/10/14/circular-ai-deals-reminiscent-of-disastrous-dot-com-vendor-financing-of-the-1990s/

I for one moved money I had in a standard Vanguard S&P index to an ETF that excludes the "Magnificent 7" (Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla):
Defiance Large Cap ex-Mag 7 ETF