It is anticipated that OpenAI would raise $750 billion, which is 50% more than its prior estimated valuation of $500 billion.
It remains to be seen if the developers of well-known AI chatbots will be able to come up with commercial plans that make their large investments worthwhile. However, that hasn’t stopped those businesses from increasing their profits in the private sector.
As demonstrated by xAI’s statement on Tuesday that it had raised $20 billion in a Series E round, surpassing its $15 billion objective, valuations for some of the largest AI unicorns continue to rise. Elon Musk founded the Grok chatbot in 2023, and according to a November CNBC article, it was anticipated to close a $15 billion investment round at a $230 billion premoney valuation.
That would represent a higher price than what xAI was asking for when it purchased Musk’s social media network, X, in March of last year. In that deal, X, then known as Twitter, was valued at $33 billion and xAI at $80 billion. The private capital market tracking website PitchBook reports that xAI has raised $42.1 billion in total.
The venture market is probably going through an AI bubble. In a recent analysis, PitchBook’s head of research for the US venture market, Kyle Stanford, stated that “the data checks most of the boxes.”
“The market has shown a sharp price increase, the market narrative has become ‘AI versus the rest,’ and much of the investment is driven by investor envy and fear of missing out on returns,” said Stanford.
According to PitchBook, OpenAI, the company that created ChatGPT, was valued at $500 billion as of last October and had raised $66.4 billion from investors since its founding. Since its founding in 2021 by former OpenAI personnel, Anthropic has raised over $39 billion by the end of 2025. Anthropic was worth nearly three times as much in September as it was a year earlier, at $183 billion.
The Wall Street Journal reported on Wednesday that Anthropic, the company that creates the Claude chatbot, is currently in negotiations to fund $10 billion at a valuation of $350 billion, or nearly double what it was worth at the time of its previous round. Additionally, the Journal reports that OpenAI plans to raise up to $100 billion at a valuation of $750 billion. According to earlier estimates, OpenAI might be worth up to $830 billion.
“What’s really unprecedented is kind of the size of the investment going into the space right now,” stated Andrew Alden, vice president of quantitative analysis at Forge Global, a marketplace that facilitates the trading of private company shares.
Alden cited Forge’s trading statistics, which revealed that AI companies accounted for 45% of volume in 2025, compared to 40% in 2024 and only 18% in 2023. According to Alden, returns on Forge’s specialized AI basket of 19 businesses increased by 191% in 2025.
He noted that some businesses have “aspirational” valuations that are quite high in relation to the income they now earn. “There still needs to be a validation of the business model, and I think that is coming,” he added.
After spending $7.8 billion throughout the first nine months of 2025, xAI reported a financial loss of $1.46 billion for the September quarter, according to a story published on Thursday by Bloomberg News. Additionally, the business said this week that it will invest $20 billion to construct its third data center, following its most recent fundraising.
For the three months that concluded on September 30, xAI made $107 million. Bloomberg reports that’s nearly twice what was reported for its June quarter.
According to the Journal’s November article, which cited financial documents presented to investors over the summer, Anthropic, a company that is apparently a candidate for a public listing, projected to spend over $3 billion on $4.2 billion in sales in 2025.
Cash-flow positive status is not anticipated by OpenAI until 2030. According to HBSC analysts, there might be a $207 billion financial shortage by then.
As of November, the Journal, citing financial data, said the corporation was on track to burn $9 billion after generating $13 billion in sales in 2025. According to OpenAI CEO Sam Altman, the company was earning far more than $13 billion, and its income was increasing “steeply.”
“Whether we burn $500 million a year or $5 billion or $50 billion a year, I don’t care – I genuinely don’t,” Altman stated in 2024. “It will cost a lot of money. It’s well worth the investment.
A request for comment was not immediately answered by an OpenAI official. An automated response to a query submitted to xAI was obtained. Anthropic chose not to respond.
A large portion of the funds raised by AI companies are used to build data centers and outfit them with pricey technology, such as AI processors. Through 2028, public hyperscalers like Microsoft (MSFT) and Oracle (ORCL) might spend a combined $2.9 trillion on capital expenditures related to AI.
According to Stanford University’s most recent AI Index research, businesses are also spending more and more money on training their AI models as they advance. Early in 2024, Anthropic CEO Dario Amodei told CNBC that training AI models would cost as much as $1 billion. Additionally, he predicted that this year’s training expenditures might reach $10 billion.
Investor Michael Burry of “The Big Short” fame stated, “I think this is the fundamental problem with generative AI and LLMs today – they are so expensive,” during a Substack debate that was released on Friday. It is challenging to comprehend the profit model or the competitive advantage of any certain model—will it be able to charge more or operate more cheaply?
Even if OpenAI, xAI, and Anthropic are among the wealthiest private AI companies, they are by no means the only ones profiting from investor zeal.
According to PitchBook data, more than half of the $512.6 billion invested by venture capitalists worldwide in 2025 went into AI. AI investments accounted for 38% of the total value of venture capital deals one year prior.
According to Demis Hassabis, CEO of DeepMind at Google (GOOGL) (GOOG), “there are parts of the AI ecosystem that are probably in bubbles,” last month. “One example would be just seed rounds for startups that basically haven’t even got going yet, and they’re raising at tens of billions of dollars.”
More than fifty people working on AI companies became millionaires in 2025 thanks to significant investment in these startups, according to Forbes. Edwin Chen is the richest of the new generation of AI billionaires, with an estimated net worth of $18 billion, from his 6-year-old company Surge AI, which improves AI models.
In one of the biggest seed rounds ever, Thinking Machines Lab, founded by former OpenAI CEO Mira Murati, raised $2 billion at a $12 billion value last July. According to Bloomberg, it was in negotiations to secure additional funds at a $50 billion valuation by November, only one month after launching its first product.
Businesses developing so-called physical AI, including autonomous cars and humanoid robots, have also gained popularity. The robotaxi company Waymo, which is supported by Alphabet, is apparently in negotiations to join the $100 billion club, while Figure AI was last valued at $39 billion.
According to PitchBook data, the majority of the top 10 venture-capital deals in the December quarter were organizations that significantly incorporate AI into their operations. Anthropic’s agreement with Nvidia (NVDA) and Microsoft topped the leaderboard, followed by Jeff Bezos’s financial investment in his physical-AI business, Project Prometheus, the founder of Amazon.com (AMZN).
In the public markets, concerns of an AI bubble have also been prevalent. While more pessimistic investors claim that internet companies’ valuations are too high and could collapse, stock market bulls have maintained that there is still space for businesses to expand.
In a recent note, Truist Securities analysts began covering a number of AI companies, including Palantir Technologies (PLTR). “We see evidence of froth in circular investments between leading AI firms and suppliers, [and] concentrated valuations in a few frontier labs, while at the same time, we think the underlying fundamentals remain orders of magnitude stronger than in prior tech bubbles,” they stated.
