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On Friday, OpenAI announced a record-breaking $110 billion valuation, raising its valuation to $730 billion, more than doubling from a year ago. Nvidia and Amazon’s participation created this latest so-called circular deal, in which money-losing artificial intelligence startups are funded by their own customers. Later that day, OpenAI announced a deal with the US Department of Defense to provide AI services after a dispute between rival Entropic and the Trump administration.
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OpenAI’s latest fundraising round follows a $30 billion raise by Anthropic, which valued it at $380 billion. Nvidia and Microsoft, another OpenAI investor, were among the participants. In January, Elon Musk’s xAI raised $20 billion, with Nvidia also in the round. All three AI startups, which have spent billions on scaling, have a long way to go before making good on their hyperscale investors. Some analysts, citing fears that the stock market is over-indexed on AI, argue that these deals could cause serious damage if AI startups don’t take off.
One option to raise more growth capital is a public offering, which OpenAI, Anthropic and xAI’s new parent, SpaceX, are all reportedly weighing. In fact, Amazon’s $50 billion investment in OpenAI’s new phase encourages it: the money comes in installments, with $15 billion upfront and $35 billion “in the coming months” with OpenAI completing undisclosed goals or completing an IPO or “direct listing of equity securities.” OpenAI CEO Sam Altman said he understands “where the concern is coming from,” but the volume of transactions shows they are not circular:
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“Revenues are growing very fast for us (and) for other companies in the industry, and it’s all about what works,” he told CNBC. “I don’t think it seems circular, although this funding requirement requires multiple parties to negotiate together.”
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On the growth front, OpenAI said ChatGPT has 50 million paying consumer customers, up from 35 million reported in July 2025, and 9 million business customers, a fourfold increase from September. It also released a joint statement with longtime investor Microsoft, reaffirming their previously rocky relationship as OpenAI aligns with Amazon.
