OpenAI Raises $122B at $852B Valuation as Oracle Cuts Jobs to Fund AI

OpenAI has secured one of the largest capital raises in the tech sector. This shows how quickly the AI race is scaling. The OpenAI funding round closed at $122 billion and values the company at $852 billion. The numbers reflect demand, but they also show how much capital is needed to stay competitive. Amidst this, Oracle witnesses layoffs as the firm is shifting spending toward data centers.

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OpenAI’s Funding Shows Growing AI Demand

The latest OpenAI funding round includes backing from Softbank, Andreessen Horowitz, and D.E. Shaw, according to reports. OpenAI said ChatGPT now has more than 900 million weekly active users, with over 50 million subscribers. The company is generating about $2 million in monthly revenue. It should be noted that it is still not profitable.

OpenAI’s valuation sits at $825 billion. This reflects how AI has moved to the center of the tech industry. A large part of that spending is going into AI infrastructure. This includes data centers and computing capacity needed to run models at scale. The firm said,

“AI is driving productivity gains, accelerating scientific discovery, and expanding what people and organizations can build. This funding gives us the resources to continue to lead at the scale this moment demands.”

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Companies Start Cutting Costs to Fund AI

Meanwhile, companies are seen adjusting to those costs. Oracle began a new round of layoffs this week. This is because the company is increasing its spending on data centers to compete with cloud rivals. Reports reveal that thousands of roles could be affected as Oracle shifts resources toward AI-related investments.

The job cuts were brought to light through emails. The email read,

“After careful consideration of Oracle’s current business needs, we have made the decision to eliminate your role as part of a broader organisational change.”

This is part of a trend, as more than 40,000 tech layoffs have been recorded this year. These companies are mostly redirecting spending toward AI.

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