🚦The Bulletin #66: OpenAI's $40 Billion Fund-Raising Deal, Musk's Bid for OpenAI, An Update on DeepSeek, & Early Investor in Silicon Valley Dies at 89
In this week's bulletin - OpenAI is set on closing a $40 billion fund-raising deal 💵, lawmakers work on a bill to block DeepSeek 🚫, and early investor in Apple, C. Richard Kramlich, Dies at 89 🍎
Hey there! Welcome back to the VWV Bulletin! This week, we’re covering the latest news and moves in VC—let’s get into it! 🔥
💡For this semester, keep up with our content if you’re interested in:
Demystifying & breaking into VC
Finding opportunities in the start-up world
Keeping up with VC investment news at Brown & beyond (pro tip: this is essential to breaking in and finding opportunities)
Enjoy the Bulletin! 😁
📈 OpenAI’s Valuation Soars to $300B
This past week, OpenAI made another big move. The AI organization is finalizing a $40 billion funding round led by SoftBank. This deal nearly doubles its valuation to $300 billion in just four months. This deal also solidifies OpenAI’s position as one of the world’s most valuable private companies, alongside SpaceX and ByteDance.
The largest venture capital deal in history was OpenAI’s $6.6 billion back in October 2024. This new deal immediately sets a new record by over six times!
OpenAI’s new $40 billion funding round follows their joint-announcement from a few weeks ago, Stargate, a $100 billion AI initiative. Stargate is an initiative that includes both OpenAI and SoftBank, along with Oracle. The New York Times has stated the partners could invest as much as $500 billion during Trump’s second presidency. 💵
Why Is It Important? 🤔
SoftBank’s $40 billion bet on OpenAI strongly indicates that major financial institutions still believe AI will continue to reshape industries. This funding round will potentially trigger more AI-focused investments and drive innovation even quicker in all sorts of industries. The investment into OpenAI signals continued market confidence in AI despite formidable competition—especially China’s DeepSeek, which recently developed a powerful AI model with fewer chips and costs.
Musk vs. Altman? 🤨
To further showcase OpenAI’s potential, there is a $97.4 billion bid by Elon Musk and his group to purchase the AI giant. Musk is a cofounder of OpenAI and had left prior to their one-of-a-kind successes. Since, there has been growing tension between Musk and OpenAI’s CEO Sam Altman. Musk’s goal is to keep the startup as a non-profit firm, contrary to Altman’s vision. He is known to have publicly criticized Stargate and to sue Altman for the direction of OpenAI.
Elon Musk’s consortium’s $97.4 billion bid for OpenAI includes his xAI, Baron Capital Group, Emanuel Capital and other companies. If an acquisition occurs for the AI giant, Musk’s xAI is thought to potentially merge. xAI has also recently raised $6 billion from a series C round. The AI startup is now valued at $40 billion, and backed by top financial advisory firms like BlackRock, Fidelity Investments, Morgan Stanley, and Sequoia Capital.
Altman’s response to the $97.4 billion offer for OpenAI:
⁉️ An Update on DeepSeek
Taking tech giants and Silicon Valley by surprise in recent weeks, DeepSeek took the world by storm. As the new AI competitor is based in China, lawmakers are seeking to “put restrictions on the app over security concerns.” Currently, New York has banned DeepSeek from government devices. As of what is known now, the restriction would only be imposed on government-owned devices.
The ban in New York stems from Gov. Kathy Hochul’s safety and protection priorities. The concern is that with a growing number of DeepSeek users in the US, the likelihood of data provided to China increases.
The push to restrict DeepSeek is similar to the recent banning of TikTok, but not exactly the same. While TikTok’s infrastructure is largely owned by Oracle, a US company, DeepSeek’s is based in mainland China. DeepSeek’s Legislators are concerned the new AI model can send user information to Beijing. The US is also looking into whether or not DeepSeek truly used restricted AI chips to train their new innovation.
Readers and followers are curious about whether the proposed restriction(s) are truly due to security concerns, or because of the immense competition it has brought to AI giants based in the US. As you may recall from last week’s Bulletin, we learned DeepSeek’s model is 20 to 50 times cheaper than competitors like OpenAI. 🤯
Only time will tell the implications of DeepSeek’s model and how it will shift the entire paradigm of AI capability as a function of resource input. Who knows, perhaps compute isn’t the true deciding factor of AI progress.
🍎 C. Richard Kramlich Dies at 89
Co-founder of New Enterprise Associates (NEA) Richard Kramlich has passed at 89. NEA began with an initial fund of $16 million and now yields $26 billion AUM. It is one of the largest and most successful venture capital firms in today’s market.
What differentiated Kramlich amongst other venture capitalists was his belief in the potential of different technologies. In the 1970s and 1980s, most investors only believed in hardware and semiconductor companies. In this era, Kramlich began investing in networking, software, and biotech companies such as 3Com, Apple, and Macromedia. Kramlich is one of the earliest investors in Apple, backing the tech company three years before their IPO.
He was also a critical component of the success of PowerPoint. When Forethought, the start-up behind PowerPoint almost ran out of money, NEA refused to invest more into the company. Instead, Kramlich used personal cash to help keep the company alive.
He was exposed to entrepreneurial finance while earning his MBA from Harvard Business School. Without Kramlich’s investments, the internet revolution—global connectivity, software advancements, and medical breakthroughs may not be where it’s at today. These sectors were only a gamble when he first invested.
Here’s a fun fact, Kramlich bought a house in San Francisco, California with some of the proceeds from his investment in Apple. Bronze apples are “fashioned” as doorknobs to remind him of his accomplishments.
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That’s it for this week, feel free to email me eason_zhang@brown.edu with any inquiries! 💌
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