OpenAI CEO Sam Altman is reportedly leading a $150 million funding round for Rain AI, a semiconductor startup aiming to rival Nvidia Corporation NVDA in the AI chip market.
What Happened: The funding, which would value Rain AI at around $600 million, follows Altman's participation in the company's $25 million seed round in 2022, reported the New York Post, citing sources with direct knowledge.
The next funding round is slated to kick off next month. “He has introduced the company to all his investors for this series B round,” the sources stated, referring to Altman.
In June 2024, Rain AI bolstered its leadership by hiring former Apple Inc. chip executive Jean-Didier Allegrucci as head of hardware engineering.
Wedbush analyst Dan Ives has described Rain AI as “one of the legitimate players at the table when it comes to the future of AI and chips.”
“There’s a lot of buzz around everything Rain AI is doing and it's the early days of the AI revolution,” he said, adding, “There’s going to be many players, not just the ‘Godfather of AI’ Jensen Huang and Nvidia.”
OpenAI and Rain AI did not immediately respond to Benzinga’s request for comments.
Why It Matters: Jensen Huang-led Nvidia is currently the world’s most valuable company, with a market capitalization of $3.606 trillion.
Analysts anticipate a “beat-n-raise” performance in Nvidia’s third-quarter earnings, projecting revenue of $33.12 billion—up sharply from $18.12 billion in the same period last year.
The AI chip giant is set to announce its earnings on Wednesday, Nov. 20.
Although Nvidia’s new Blackwell AI chips are facing overheating concerns, the company’s valuation is still anticipated to climb, fueled by the promise of its next-generation AI chip. I/O Fund analyst Beth Kindig predicted Nvidia could reach a $10 trillion valuation in September.
Meanwhile, last month, Altman’s OpenAI raised over $6.5 billion in new funding, boosting its valuation to $157 billion.
The funding round was led by Thrive Capital and included major tech players such as Nvidia and Microsoft Corporation MSFT. Since 2019, Microsoft has invested about $14 billion in OpenAI.
Price Action: Nvidia shares climbed 4.89% on Tuesday, closing at $147.01, and gained an additional 0.46% in after-hours trading, reaching $147.69 as of this writing, according to data from Benzinga Pro.
Image via Shutterstock
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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