Tiger Global Plans to Join OpenAI’s Funding Round
The Takeaway
• Tiger Global plans to invest in OpenAI
• Khosla and Thrive also investing
• Round values company at $150 billion
A clearer picture is emerging of OpenAI’s massive financing, which values the ChatGPT developer at $150 billion.
Venture capital firm Tiger Global Management plans to participate in the multi-billion dollar round, according to people familiar with the matter. Tiger would join Thrive Capital, Microsoft, Nvidia, Apple and the Abu Dhabi AI investment firm MGX, as well as Khosla Ventures which are also in talks to participate in the multi-billion dollar round.
Tiger developed a reputation during the peak of the record bull-market in 2021 for leading high-priced deals and pushing up valuations across private tech. That year, it inked over 300 VC deals, according to PitchBook. It has since marked down the value of many of its startup stakes and offloaded shares in some of its companies, including OpenAI rival Cohere, and has dramatically reduced its pace of investment, participating in only 19 VC deals so far this year.
The amount of Tiger's investment couldn't be learned. The deal wouldn’t be Tiger’s first investment in OpenAI. The firm purchased $125 million in OpenAI shares in late 2021 with capital from its $12.7 billion fund, The Information has previously reported. Tiger was also part of an investor group that pushed to get OpenAI’s board of directors to reinstate CEO Sam Altman after he was fired last fall.
Khosla is one of OpenAI’s earliest investors. The firm invested $50 million in OpenAI in 2019, becoming the first investor in the company’s for-profit subsidiary. Khosla raised a $900 million growth fund late last year.
It’s unclear whether the other VC firms that have previously backed OpenAI, including Sequoia Capital, Founders Fund and Andreessen Horowitz, will invest in the new round. Both Sequoia and Founders Fund sat out the 2023 secondary secondary round that valued OpenAI shares at $86 billion.
Some VC firms that balked at that $86 billion price tag are considering investing this time, despite the significantly higher valuation. That’s because investors in the latest funding round will receive newly issued shares in exchange for their investment, whereas in past financings OpenAI sold only shares held by earlier investors. Primary shares come with certain privileges, including access to company information, that secondary shares typically do not.
Venture firms participating in the new round, which is expected to raise a total of between $5 billion and $7 billion including money to buy out employees who want to sell some of their shares, have begun to form special-purpose vehicles, which pool money to invest in a specific company. Thrive, Khosla and Tiger all have SPVs and have solicited interest, according to the people familiar with the matter. Thrive Capital is leading the round and plans to commit $1 billion, one of the people said.
The $150 billion valuation ranks OpenAI amongst the highest-valued startups in the world and comes as the company reaches 10 million paying subscribers, The Information reported.
Those new numbers imply the company is generating more than $225 million in revenue per month. The company’s revenue has risen about 150% since the end of 2023 to $4 billion.
This week, the company released its highly-anticipated Strawberry reasoning AI, which has the ability to “think” before it responds to users to better answer queries.
Research Calls I
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Upgrades:
- Borr Drilling (BORR) upgraded to Outperform from In-line at Evercore ISI; tgt $9
- Federal Realty (FRT) upgraded to Buy from Neutral at Citigroup; tgt raised to $135
- Medical Properties Trust (MPW) upgraded to Buy from Neutral at Colliers Securities; tgt $6.50
- Roche Hldg (RHHBY) upgraded to Buy from Neutral at BofA Securities
- Sabra Health Care REIT (SBRA) upgraded to Buy from Neutral at Citigroup; tgt raised to $20
- SL Green Realty (SLG) upgraded to Neutral from Sell at Citigroup; tgt raised to $66
- Sunstone Hotel (SHO) upgraded to Equal Weight from Underweight at Wells Fargo; tgt $10.50
- Xenia Hotels (XHR) upgraded to Overweight from Equal Weight at Wells Fargo; tgt lowered to $15
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Downgrades:
- Alexandria RE (ARE) downgraded to Neutral from Buy at Citigroup; tgt lowered to $125
- AstraZeneca (AZN) downgraded to Sell from Hold at Deutsche Bank
- Capri Holdings (CPRI) downgraded to Neutral from Buy at Citigroup; tgt $41
- CubeSmart (CUBE) downgraded to Neutral from Buy at UBS; tgt raised to $54
- Fulcrum Therapeutics (FULC) downgraded to Neutral from Buy at H.C. Wainwright; tgt lowered to $4
- Garmin (GRMN) downgraded to Underweight from Equal Weight at Barclays; tgt lowered to $133
- Halliburton (HAL) downgraded to Sector Perform from Outperform at RBC Capital Mkts; tgt lowered to $37
- Moderna (MRNA) downgraded to Perform from Outperform at Oppenheimer
- Moderna (MRNA) downgraded to Underweight from Neutral at JP Morgan; tgt lowered to $70
- Moderna (MRNA) downgraded to Hold from Buy at Jefferies; tgt lowered to $65
- Nabors Industries (NBR) downgraded to Neutral from Buy at Citigroup; tgt lowered to $75
- RLJ Lodging Trust (RLJ) downgraded to Underweight from Equal Weight at Wells Fargo; tgt lowered to $9
- Sendas Distribuidora S.A. (ASAI) downgraded to Neutral from Buy at BofA Securities
- Voya Financial (VOYA) downgraded to Mkt Perform from Strong Buy at Raymond James
- Others:
- Arm Holdings plc (ARM) initiated with an Outperform at Raymond James; tgt $160
- Constellation Energy (CEG) initiated with a Hold at Jefferies; tgt $186
- Eli Lilly (LLY) resumed with a Buy at Citigroup; tgt $1060
- GE Vernova (GEV) initiated with an Outperform at BMO Capital Markets; tgt $245
- Kiniksa Pharmaceuticals (KNSA) initiated with a Buy at Jefferies; tgt $40
- Nature's Sunshine (NATR) initiated with a Buy at Canaccord Genuity; tgt $18
- NRG Energy (NRG) initiated with a Hold at Jefferies; tgt $82
- NuScale Power (SMR) initiated with an Outperform at CLSA; tgt $11
- Oruka Therapeutics (ORKA) initiated with a Buy at Jefferies; tgt $40
- Public Service (PEG) initiated with a Hold at Jefferies; tgt $85
- SolarWinds (SWI) initiated with a Sector Perform at Scotiabank
- Talen Energy (TLN) initiated with a Buy at Jefferies; tgt $226
- TKO Group Holdings (TKO) initiated with a Buy at Pivotal Research Group; tgt $170
- Vistra Corp. (VST) initiated with a Buy at Jefferies; tgt $99
- DSV (DS81 TH) +4.2%
- DSV in €14.3 Billion Deal to Buy Deutsche Bahn’s Logistics Unit
- Fresenius SE (FRE TH) +1.8%
- Iberdrola (IBE1 TH) +1.2%
- Qatar Sounds Out Spain Govt to Raise Iberdrola Stake: Expansion
- Rio Tinto (RIO1 TH) +1%
- UniCredit (CRIN TH) +0.6%
- Bundesbank Chief Weighs In on UniCredit Move on Commerzbank
- AstraZeneca (ZEG TH) -1%
- Henkel (HEN3 TH) -1.1%
- Henkel Downgraded to Hold at Jefferies on Pricing Pressures
- Carl Zeiss Meditec (AFX TH) -1.3%
- Wartsila (MTA TH) -1.6%
- Danone (BSN TH) -1.7%
- Danone Cut at Jefferies, Margin Acceleration Now Less Pronounced
DAX:
- Fresenius SE (FRE TH) +1.8%
- Fresenius SE Raised to Overweight at JPMorgan; PT 40.10 euros
- Infineon (IFX TH) +1.4%
- Bayer (BAYN TH) +1.1%
- Commerzbank (CBK TH) +0.6%
- Bundesbank Chief Weighs In on UniCredit Move on Commerzbank
- Henkel (HEN3 TH) -1.1%
- Henkel Downgraded to Hold at Jefferies on Pricing Pressures
MDAX:
- Evotec SE (EVT TH) +1.2%
- Hensoldt (HAG TH) +1.2%
- Thyssenkrupp (TKA TH) +1.1%
- Aroundtown (AT1 TH) -1.9%
- Aroundtown Cut to Underperform at BNPP Exane; PT 2.50 euros
SDAX:
- Duerr (DUE TH) +4.4%
- Duerr Raised to Buy at HSBC; PT 26 euros
- Heidelberger Druck (HDD TH) +1.9%
The yen strengthened for a fourth day against the dollar, while falling Treasury yields broadened an emerging-market currency rally to Asia after fresh data sustained expectations for the Federal Reserve to ease policy. Stocks fluctuated in the region, with the yen’s rise to around 141 per dollar pressuring those in Japan, an export-oriented economy. Benchmarks rose in Australia and Hong Kong, following a fourth day of gains on Wall Street. The policy-sensitive two-year Treasury yields dropped six basis points in Asian trading, weighing on the dollar as emerging Asian currencies including the Korean won carried over a rally from Latin America. The range-bound trading in equities suggests caution ahead of next week’s Fed policy meeting, after data showed Thursday that US producer price index picked up slightly in August after the previous month’s numbers were revised lower. Meanwhile, categories that feed into the Fed’s preferred inflation gauge were muted. While the latest figures did little to alter expectations that the US central bank will start reducing interest rates, the latest decline in Treasury yields and the dollar’s broad weakness suggests some investors are still betting on a bigger-than-usual first cut of 50 basis points. Adding to the debate was former New York Fed President William Dudley, who said at a forum in Singapore Friday that he sees scope for a half-point rate cut at next week’s meeting. Markets are seeing “a delayed reaction to the dovish repricing of FOMC rate cuts yesterday following the US PPI data which kept the door open for a 50bps cut next week,” said Carol Kong, a currency strategist at Commonwealth Bank of Australia. “Though we still believe a 25bps cut is much likely than a 50bps cut, the possibility of a 50bps cut will keep the US dollar heavy in the meantime.” Thursday’s wholesale inflation data followed the more closely watched consumer price index, which showed underlying inflation accelerated in August. Yet policymakers have made it clear that they’re currently highly focused on softness in the labor market, which is more likely to drive policy discussions in the months ahead. Gold rose to a fresh record, fueled by the dollar’s decline and another set of US data Thursday that showed an uptick in applications for unemployment benefits. In Japan, just over half of central bank watchers see authorities conducting their next rate hike in December, while none expects a policy move when the board meets next week, according to a Bloomberg survey. In the past four weeks, five of nine board members have telegraphed their intention to raise rates again if the bank’s inflation outlook is realized. Market volatility in the days after the Bank of Japan’s July 31 rate hike hasn’t spooked policymakers enough to derail them from the normalization path. Nevertheless, some hedge funds are adding bullish yen wagers in the options market on their expectation that the currency will extend the rally that’s made it the world’s top performer this quarter. In China, the CSI 300 stock benchmark gave up earlier gains to turn flat, after falling to the lowest since January 2019 Thursday. While President Xi Jinping called on officials to achieve the country’s annual growth target of around 5%, a relentless rally in Chinese government bonds extended, pushing 10-year yields to a level unseen since official records became available in 2002. Chinese markets will be closed Monday and Tuesday for a public holiday. In Asia, data set for release includes Japan industrial production, trade balance figures for India and gross domestic product for Sri Lanka. West Texas Intermediate, the US oil price, edged higher after rising more than 2% Thursday as storm Francine disrupted production in the Gulf of Mexico. US After Hours RH +18.5% jumps following earnings, W +4.3% higher in sympathy; ORCL +5.8% on bullish outlook; ADBE -9.1% lower on earnings.
Nikkei -0.59% Hang Seng +1.06% CSI +0.06% Shanghai +0.00% Shenzen -0.53%
Eur$ 1.1087 CNH 7.1086 CNY 7.1052 JPY 140.84 GBP 1.3149 CHF 0.8493 RUB 89.2000 TRY 33.9797 WTI$ 69.38 +0.59% Gold 2,569 +0.42% BTC 57,902 -0.50% ETH 2,355 +0.12%
S&P +0.09% Nasdaq +0.08% EuroStoxx +0.31% FTSE +0.10% Dax +0.31% SMI +0.25%
Macro :
- Dudley Sees Case for Half-Point Fed Rate Cut Next Week
- Point72 Plans to Return Billions as Big Hedge Funds Cap Assets
- Telegram Delivers a $5.9 Billion Warning: Bloomberg Crypto
Keep an eye on :
Keep an eye on :
- ADP FP : French Court Says Long-Distance Transport Tax Constitutional
- AUPH US : Aurinia Pharma Rises on Tang Capital Stake, Board Changes
- BA US : Virgin Australia Converts 12 Boeing 737 Max-10 Orders to Max-8s
- BO US : Boeing Machinists to Go on Strike After Rejecting Labor Deal
- BOL FP : Bollore Intends to Launch Three Buyout Offers Then Squeeze-Outs
- CBK GY : Bundesbank Chief Weighs In on UniCredit Move on Commerzbank
- CON GY : WirtschaftsWoche: Continental 5000 Conti employees have already left – but now layoffs are threatened
- DOV IM : doValue in Pact With Greek Bank to Manage Around €200m Assets
- DSV DC : DSV in €14.3 Billion Deal to Buy Deutsche Bahn’s Logistics Unit
- DUST SS : Dustin Prelim 4Q Net Sales About SEK5.0B, Est. SEK5.14B
- FGR FP : French Court Says Long-Distance Transport Tax Constitutional
- ERA FP : Schlumberger, Rio Among Possible DLE Providers to Chile’s Enami
- EBS AV : Erste Group Bank Supervisory Board to Propose Haber as Chair
- FMONC FP : Bollore Intends to Launch Three Buyout Offers Then Squeeze-Outs
- GALP PL : GALP SAYS EXECUTION OF AURORA LITHIUM PROJECT FACES DELAYS
- GLEN LN : Vitol Hires Glencore, Trafigura Iron Ore Traders in Metals Push
- IBE SM : Qatar Sounds Out Spain Govt to Raise Iberdrola Stake: Expansion
- IDUNB SS : Idun Industrier Offers SEK200 million Shares via Carnegie
- KESKOB FH : Kesko Aug. Comparable Sales -3.9%
- KCR FH : Konecranes Upgrades FY Net Sales Outlook
- NOKIA FH : Nokia Says Board Not Searching to Replace CEO Pekka Lundmark
- NVDA US : Saudi Arabia expects to get access to Nvidia's high performance chips 'within the next year'
- OpenAI IPO : OpenAI Introduces AI Models With Reasoning Abilities
- Poolside IPO : French Startup Poolside Nears $3 Billion Valuation for Coding AI
- ROG SW : FDA Approves Genentech’s Tecentriq for Subcutaneous Injection
- Sailpoint IPO : Thoma Bravo Is Said to Interview Banks for Sailpoint IPO
- SECUB SS : Securitas Takes SEK551m Provision on US Paragon Investigation
- TAP PL : Portugal’s TAP Wants to Increase Revenue Per Passenger: Visao
- TCELL TI : Turkcell Iletisi: Q2 2024 Presentation
- UMG NA : Bollore Intends to Launch Three Buyout Offers Then Squeeze-Outs
- X US : US Steel Deal ‘Doomed,’ Says Union ‘Steadfast’ in Opposition
- VLA FP : Valneva Offers 22.6m Shares via Jefferies & Bryan, Garnier & Co
- DG FP : French Court Says Long-Distance Transport Tax Constitutional
- VOW GY : VW’s Audi, Unions Reach Deal on Restart of Brussels Site: L’Echo
- WLN FP : Worldline Cuts FY Guidance; CEO Grapinet Steps Down
>>> Up
* Austrian Post Raised to Accumulate at Erste Group
* BASF Raised to Hold at Jefferies; PT 43 euros
* Fresenius SE Raised to Overweight at JPMorgan; PT 40.10 euros
* Demant Raised to Hold at HSBC; PT 260 kroner
* Duerr Raised to Buy at HSBC; PT 26 euros
* Eni Raised to Neutral at BNPP Exane; PT 15 euros
* GN Store Nord Raised to Buy at HSBC; PT 195 kroner
* Husqvarna Raised to Buy at ABG; PT 77 kronor
* Inmobiliaria Colonial Raised to Outperform at BNPP Exane
* Inmobiliaria Colonial Raised to Outperform at BNPP Exane
* Kroger Raised to Buy at CFRA
* Straumann Raised to Buy at HSBC; PT 150 Swiss francs
* Travis Perkins PT Raised to 1,150 pence from 950 pence at RBC
* Xior Raised to Neutral at BNPP Exane; PT 33 euros
>>> Down
>>> Down
* Aedifica Cut to Underperform at BNPP Exane; PT 60 euros
* Aroundtown Cut to Underperform at BNPP Exane; PT 2.50 euros
* AstraZeneca ADRs Cut to Sell at Deutsche Bank
* Chemometec Cut to Sell at Nordea
* Danone Cut to Hold at Jefferies; PT 63 euros
* Garmin Cut to Underweight at Barclays; PT $133
* Great Portland Cut to Underperform at BNPP Exane; PT 310 pence
* Henkel Cut to Hold at Jefferies; PT 88 euros
* LEG Immobilien Cut to Neutral at BNPP Exane; PT 90 euros
* LEG Immobilien Cut to Neutral at BNPP Exane; PT 90 euros
* Moderna Cut to Hold at Jefferies; PT $65
* Rentokil Cut to Hold at Stifel; PT 420 pence
* Wartsila Cut to Reduce at HSBC; PT 15.50 euros
>>> Initiation
* Wartsila Cut to Reduce at HSBC; PT 15.50 euros
>>> Initiation
* Austevoll Seafood Reinstated Buy at Arctic Securities
* Eli Lilly Resumed Buy at Citi; PT $1,060
* PSP Swiss Rated New Overweight at Barclays; PT 135 Swiss francs
* Solar Foods Rated New Sell at Inderes; PT 11 euros
* Swiss Prime Rated New Equal-Weight at Barclays
>>> Call
* ARM Holdings Rated Outperform at Raymond James on Growth View
>>> Call
* ARM Holdings Rated Outperform at Raymond James on Growth View
* BASF Downside Now More Limited, Raised to Hold at Jefferies
* Danone Cut at Jefferies, Margin Acceleration Now Less Pronounced
* Henkel Downgraded to Hold at Jefferies on Pricing Pressures
* Travis Perkins Price Target Boosted to Street-High at RBC