OpenAI’s $100B Funding Round, SpaceX 2026 IPO, and AMD’s Debt Play

0:12welcome everyone to the information's ti tv my name is akash basricha it is thursday february 19th. Today on the show, the information has exclusive reporting that OpenAI is finalizing its first commitments for a massive$100 billion funding round. We'll speak with our OpenAI reporter who broke that story. We also have more exclusive reporting on renewed momentum in the consumer IPO market, including Hungry Root, the grocery delivery app preparing for a public offering that could come as soon as this year. We'll then zoom out to the broader IPO landscape. We'll talk AI, space, and consumer IPOs with Renaissance Capital.

0:53We'll break down how AMD is taking a page from NVIDIA's playbook, acting as a financial backstop for Crusoe. And we'll wrap with a segment with our sponsor, PwC. Amid the so-called SaaSpocalypse, we are asking the question on Silicon Valley's mind right now, what does the future of software look like in the era of AI. It's a big show, so let's get right on into it. OpenAI is finalizing first commitments from investors for its massive$100 billion funding round. This comes as the company continues to need enormous capital to fund the build-out of its AI products and data centers. Joining me now to break it all down is Sri Mupiti, our OpenAI and Anthropic reporter.

1:35Sri, welcome back to the show. It's great to have you here. Excited to be here. What do we know about the current state of OpenAI's funding round? What we know is that OpenAI is finalizing its first set of commitments for its$100 billion plus round that it's raising. So this round, which we had previously broken back in December, is up to$100 billion, but potentially even more now. The round valuation is$730 billion pre-money. So if, for example, the$100 billion plus comes in, they'll put it back out to$830 plus in terms of a post-money valuation. And in terms of the strategics that are investing this initial slate of commitments, it is Amazon that can invest up to$50 billion.

2:16It is NVIDIA that is up to$30 billion. And then Microsoft in the low billions of dollars. And then, of course, SoftBank, like a large investor that had led the$40 billion plus round last year, is coming in for up to$30 billion. This$30 billion will be split over three installments of$10 billion over the course of the year. Now, the strategic investors here, we've talked about it a little bit with you, but it's so interesting to me that they really make up the lion's share of this$100 billion commitment. And I almost wonder, to what extent could OpenAI raise all this capital without them? What do you make of the fact that they are front and center here?

2:56It makes a lot of sense, especially because it's such a large round. I don't think they're spending private capital raised this big, that these strategics who have huge pools of capital and balance sheets can actually invest in a company like OpenAI. It's not to say that other financial investors will not invest either. So after the slate of initial strategics coming, there will be actually other financial investors. So we actually reported that OpenAI, for example, as it talks to raise from existing investors such as Thrive Capital, Coastal Ventures, as well as Sequoia and others. So we'll potentially see that 100 billion plus even go up even further because of the strategic amounts that it could actually push it out even larger than what we had initially expected.

3:41Now, one of the interesting parts of your story is you had some reporting on the deal structure as well. So you reported that investors will get preferred shares that would convert to common stock in an exit like an IPO, and they will also get a 1x liquidation preference. Explain to us what that means. And then the broader question I have for you is, did all these investors get what they want ultimately here? Is this a good deal for them? This is a great deal. I think this is the purpose of the restructuring that happened last fall that we have been really closely following, where essentially we're turning OpenAI into a traditional structure that investors can get paid out from.

4:21And so these types of terms are very typical of other companies. And so being able to have 1x liquidation preferences, That's a standard deal term that essentially promises investors that they'll get at least their money back in the event of a sale or a sale of a company. And then also the fact that it turns into common stock is also really exciting for these investors that hope that the company will go public, which we have reporting on that could be as soon as the fourth quarter of this year. But what I found really interesting is that OpenAI is actually calling this a Series C, which when I first saw it, I was struck by it because I was like a Series C.

4:58But it actually is interesting because they have only traditionally raised three rounds. Those rounds have just been huge. So for example, this is the Series C,$100 billion. Series B was last year, which was roughly$41 billion. And then the first round,$6.6 billion was from 2024. And that's not including, for example, the Microsoft round. So when you actually count it up, it is a third round, a Series C. But it does not look like a traditional Series C company. Yeah, well, I can already see all the startups that will come in saying, we're doing a C. We're doing an OpenAI-sized Series C, though.

5:29I mean, you know, that is certainly the way some of these rounds end up trending. Although this is a huge number. And it kind of leads me to the next question, which is, I want to understand or remind ourselves of the financial situation that OpenAI is in right now and why they need to raise all this capital. What are the latest figures now in terms of revenue and how much cash they're burning? So the latest figures we still have are from last summer. But what we know based on companies' announcements is that the company had crossed, or we had actually reported this, that the company had crossed$13 billion in revenue last year, so 2025.

6:05And then we had previously reported last summer that the company between 2025 to 2030 would spend actually$450 billion in terms of all the costs of training and running its models as well as any backup servers that it needs. And so this makes sense in terms of why the company is setting out to raise$100 billion plus now because they have so much spending to come still. And you mentioned it could come as soon as the fourth quarter of this year, the IPO. Is there any discussion from the people that you're talking to about this round potentially giving them a little more wiggle room in terms of that timeline or even pushing it out a little bit later?

6:44Exactly. I think what I'm hearing from the folks that I'm talking to is that it's sort of this dual scenario where if, for example, the conditions are right, you can never predict when a company actually goes public because it is such a macro thing. The company's essentially preparing and laying the groundwork to go public as soon as the fourth quarter. But of course, this$100 billion plus round would allow them to have more runways so that they can time it exactly when they actually want to. And so it could go into 2027. I think it's just that the company is preparing the steps to do so just because the process is going public, as we all know, is so difficult and that you have to sort of make sure that you have all your ducks in a row.

7:26Great. Well, Sri, I want to thank you for coming on. That is Sri Mupiti, our OpenAI and Anthropic reporter here at The Information. Speaking of IPOs, our e-commerce reporter, Anne Guillen, has exclusive reporting on the IPO plans for grocery startup Hungry Root. Her story out today also talks about how the consumer sector is faring as software stocks have plunged. I want to bring on Anne to share with us what we know. Anne, welcome back to the show. It's great to have you here. Hi, Akash. What is Hungry Root? I never heard of them. Hungry Root is an online grocery delivery and meal planning service.

8:05So if you think back to like the Blue Apron and other kinds of meal kits that were popular around a decade ago. This is kind of an updated version of that. So it's not quite a meal kit, but it's an online service where you put in kind of all your dietary preferences, your health goals, what you like and don't like. And then Hungry Root comes up with a weekly menu for you, weekly recipes, and then they will also ship you the groceries. So it's kind of meal planning and grocery delivery all rolled into one. So am I living under a box here? Like, I mean, I have never heard of Hunger Root, and maybe you've used it because I know you're a loyal Instacart customer from what I remember.

8:57Have you used it? I've tried it out before, and yeah, it's interesting. It's definitely a different experience than something like an Instacart. And it's interesting the way that they've structured the business very differently than an Instacart, where Instacart is kind of more for that, like, immediate, you know, I ran out of milk or I ran out of eggs and I need it in a couple of hours. Hungry Roots pitch is that it's more replacing a meal prep session on Sunday or when you're sitting down to kind of plan out what your meals for the week are going to look like. Okay, so closer to a Blue Apron kind of model, then.

9:38Right, and their pitch is that all of the user data that they have and their recommendation systems makes that whole process very easy to personalize it to exactly what you like. So how is the company doing financially? How big is the business even? It's, you know, to your point that you had never heard of it before, it's actually pretty large for a company that maybe isn't on as many people's radars. They just reported that their 2025 revenue was$700 million, which is 55 % growth from the year before. So it's a pretty decently sized business. And I spoke to their CEO, and he said that this brand awareness is one of their big goals for this year.

10:27So trying to get more customers and more shoppers to hear about them for the first time, to understand, you know, how it could work for them. And also, yeah, kind of overcome this preconception that people might have that it's just another meal kit, you know, kind of explaining how and why they're different. And so what did he say about the company's IPO plans or what does your reporting tell us? I reported that, you know, they're eyeing a potential IPO that could come as soon as this year. But they're not, you know, there's no formal timeline or process yet. But I do think that they're a great example of kind of how the consumer narrative has changed, even just over the past couple of weeks.

11:16You know, for the past couple of years, I've reported a lot about how consumer has just been this sector that's been kind of left for dead, both by VCs and investors in the private market as well as, you know, investors in the public market as well. And there just hasn't really been a lot of appetite for consumer IPOs really since 2020. 2020 and 2021 was the last kind of big consumer IPO wave that we saw with companies like Allbirds, Warby Parker, Rent the Runway. And part of the reason why we haven't seen consumer IPOs for the past couple of years is because, by and large, all of those companies, most of those companies from the last kind of vintage, haven't really performed very well.

12:04They really indexed on growing as quickly as possible and not on becoming profitable. And so when you're reporting to Wall Street quarter after quarter that you're not making any money, that's a pretty hard narrative to sell. So I think Hungry Root and some of these other companies that have been coming up more recently and getting to an IPO-ready stage, they're fundamentally just much more high-quality businesses than some of the companies that we saw the last time around. Well, and this was a point that Brian Sugar, who we had on the show with you for a previous story that you did, I mean, he made this point that consumer companies traditionally haven't had great unit economics.

12:47That's been the reason for their downfall. it seems like this newer crop of consumer companies, at least some of them have learned their lesson. And so the crop of consumer companies coming to market are actually better businesses. Who are the other consumer names that you're watching for IPOs here? Yeah, well, I mean, you just saw Once Upon a Farm, which is a kid's snack brand. The actress, Jennifer Garner, was actually a co-founder of the brand. But that's a healthy snack brand. They just went public a couple of weeks ago, and the shares have performed really well since then. So I think a lot of people are interpreting that as a good sign.

13:30There's a juice brand, Suja Life, that said they filed confidentially in the fall. So I think a lot of people are expecting them to potentially go out soon, as well as Jersey Mike's, which is a sandwich chain. Good old Jersey Mike's. Yes. Blackstone acquired them last year. And it's interesting that they reportedly are already eyeing an IPO. I think just in contrast to a lot of the software investments that private equity firms have made over the past couple of years, they've been trying to get those off their books and they really can't. So I think that really kind of illustrates just kind of the divide between consumer and some of these other tech and software companies that are really having to contend more with these questions about what risk does AI pose.

14:24Great. Well, Anne, I want to thank you for coming on. That is Anne Guillen, our e-commerce reporter here at The Information. information. To continue our OpenAI coverage and our coverage of IPOs more broadly, I want to bring on someone who specializes in studying these new issuances. Avery Marquez is Director of Investment Strategies at Renaissance Capital. Avery, welcome to TITV. It's great to have you here. Yeah, thank you for having me. So you are an IPO specialist. Are you guys tracking the IPO for OpenAI just as closely as everyone else is in the tech sector right now? Absolutely. AI is a huge theme in the IPO market right now.

15:05It has been for maybe the last couple of years, but has definitely grown in scale. And the looming OpenAI IPO is certainly on our minds right now. Now, so we reported today on this funding round for OpenAI, $100 billion. It's nearing its final stages of coming together. They've got initial commitments from investors. The question I want to ask you to start with here is, to what extent does a funding round like this make it easier for them to delay an IPO? I mean, we've reported that it could be as soon as the fourth quarter of this year. Does this give them more leeway here? Do you see them requiring the public markets for their capital?

15:48That's a great question. And normally I would say that a huge funding round like this could absolutely delay an IPO. But I don't think that will be the case for OpenAI for two reasons. The first being that given how much capital a company like OpenAI requires, tapping the public markets is going to be an eventuality. They're going to be eventually needing money from public investors, even with how generous private markets have been. And the second reason is maybe even more compelling, and that is pressure from insiders on liquidity. Private investors want to eventually realize their return on investment, and the public market is possibly the easiest way for them to do that.

16:33Now, what questions do you have in terms of deal structure here for OpenAI's offering or maybe even an anthropic offering? We've got SpaceX coming up. I mean, are there trends here in terms of deal structures? Or just as you pointed out, I mean, with insiders wanting to sell, I mean, is there any particular type of deal structure that would really benefit them as these companies look to go public? Yeah, the traditional IPO is definitely the premier way to go public. And insider selling on the IPO isn't uncommon. And I think, in fact, will probably be a theme among these very large IPOs that come to market this year.

17:12There is the question of maybe they might pursue a direct listing if they don't need the capital, but they want to give their insiders liquidity. liquidity? And I think that is a fair question, but ultimately a traditional IPO is still going to give them capital. And like I mentioned, even with all of that generous private funding, they need capital. Something that I think we'll also be watching for is dual class share structure. I think that will also be common with these larger IPOs, especially as some of the more visionary founders look to retain control even when the company is public. Explain that for us a little bit more for people who don't know dual class share structures, what the two classes offer, which ones have voting rights.

17:55Just unpack that for us a little bit. Sure. Yeah, a dual class share structure implies two shares, two classes. There can actually be more than that. It really just depends on the company. But ultimately, what it means is that some shares have singular voting power. You own a share, you get a vote. But what we see sometimes, especially with these very kind of visionary companies, are shares that have outsized voting power. So that might be 10 shares per vote, 20 maybe in a more extreme case. We've even seen up to 100 shares per vote, even recently with StubHub. So that allows insiders, typically founders, to retain an outsized portion of voting power, even with maybe diluted economic ownership.

18:43hmm so one of the questions i've been thinking about is if we've been talking a little bit about the race to go public amongst these ai labs and we had a bit of a curveball through at us when xai merged with spacex because i think nobody really expected xai to be the first big ai startup or ai lab rather to go public and now it's very much looking like they could be you know by way of this acquisition. But we've seen some headlines out there that OpenAI and Anthropic are kind of in a bit of a race to go public. And I wondered, from your end, does it really make a difference who goes public first?

19:22I mean, is there any business interest in going public first at all? Absolutely. And it can kind of be a two-part answer. One being that you go public first, you get the buzz. You are the first major AI company to tap public markets. But on the flip side, you're also the first one exposed to that potential slide from being in public markets. If your stock doesn't do well, that could totally disrupt the IPO market going forward. So there is, I think, a race to capture this early buzz and the early excitement that we've seen growing around AI. But there might also be that voice in the back of their head saying, maybe it's better to let the other one go first, see how markets respond before we put our money on the table.

20:21I want to go back to what you were talking about with the insiders selling shares, and that being a theme for some of these big issuances. I mean, educate us here a little on how you end up tracking that? Because I know there's a lockup period. I mean, does that end up having an effect on the stock price after the lockup period expires? Or how does it end up affecting, you know, the stock price ultimately? Ultimately, in a traditional IPO, when insiders sell shares on the offering, what that means is that those shares are right, they're bought by the underwriters, they're distributed by the underwriters.

21:01So there is no initial trading by these insiders like there would be in maybe a direct listing. So the impact on the share price might not be tied directly to insiders selling shares as much as it would be public investors interpreting insiders wanting to dump their shares as possibly a negative aspect. And so in other words, I mean, is there any way for us to know which insiders are selling their shares in the offering itself? Is that sort of where reporting comes into play? Or I mean, how do you think of that as a student of this space? Yeah, you can find that information in a company's prospectus.

21:45They might not disclose every single small shareholder. A lot of them do have tables that show every insider that is selling shares, but you certainly can see which of the major shareholders. So that's 5 % or more or any officer or director of the company. You can find that information right in the prospectus. So they do have to be forthcoming with that. And that gives public investors a leg up on that information. Now, you've been at Renaissance for nearly seven years now. And I wonder over that time how you've seen the balance between a company's narrative in an IPO, how that weighs with the company's fundamentals.

22:28And I'm asking the question because here we have a SpaceX IPO, for example. I mean, the narrative around orbital data centers, for example, is the thing that they seem to be pushing. And now they have the AI angle with XAI. and you know a lot of these companies ai companies especially they're burning cash right i mean this this these are not the most um uh financially prudent companies at least as far as the bottom line goes that that we've seen and so i wonder how you've seen that balance shift over your time at renaissance and how you expect it to change it really depends on the market we're in if we are in a very strong market, public investors might be more willing to accept a played up narrative on maybe not such a match in fundamentals.

23:20Whereas in a stricter market where there's more discernment, like what we've seen really over the past few years, a narrative only goes so far. You can tell every investor that is interested that you're a tech company, you're a tech company, you're an AI company. But if your business model, if your fundamentals don't show that you're really a tech company, you're really just a consumer company, maybe with a tech platform, or that your financials don't line up with a company that should be growing maybe 20 % plus a year and you're only growing 10, investors are much less willing to accept that narrative.

24:01premium valuations go with premium fundamentals in much more challenging markets. And so with all that in mind, and also taking into context the recent performance of some of the software stocks that we've seen, I'm not asking you to predict anything about how an OpenAI or a SpaceX IPO will perform once they do list, but how much appetite do you think there will be for these companies? And how are you thinking about the considerations that investors will make? That's a really good question. I think it's hard to say, but right now, the appetite for AI, for a true AI play, is very strong. It is volatile.

24:50We've seen, with the recent tech sell-off, that there are fears around AI. But a company like OpenAI or philanthropic where AI is their business, there's no way to spit it that it's not. That could definitely and very likely will definitely cause a lot of buzz, a lot of demand. And these will likely be very hot deals when they do come to market. Great. Well, Avery, I want to thank you for coming on. That is Avery Marquez, a director of investment strategies at Renaissance Capital here on TITV. Okay, AMD is taking a page out of NVIDIA's debt playbook. The chip giant is acting as a financial backstop to Crusoe, so the AI startup could secure a big loan from Goldman Sachs.

25:37Ultimately, the deal will keep money flowing to AMD's chips. Here to explain the finer points of the deal is our AI and finance reporter, Myles Krupa. Myles, welcome back to the show. It's great to have you here. Thanks, Akash. Okay, I want you to explain your story in simple terms. And I cannot promise that I'm not going to interrupt because there's a lot going on here. So we're going to wrestle with each other. We're going to try to figure it out. But tell us about how AMD is acting as a backstop for Crusoe. Sure. So Crusoe is a cloud company. They rent out NVIDIA chips and AMD chips. In this case, they are buying a pretty large slug of AMD chips.

26:23And AMD is basically helping them do that by agreeing to rent those chips if Crusoe can't find any other customers for them. And so what this allowed Crusoe to do was go out and raise$300 million of debt from Goldman Sachs at a pretty low 6 % interest rate because, you know, the bank was sort of looking through to that AMD contract and saying, okay, there's basically guaranteed usage of these chips. And so, you know, Crusoe was able to raise a good chunk of money this way. And it's very similar to something that NVIDIA has done in the past, which I'm sure we can get into more. Now, I just want to make something clear here.

27:11So the debt that Crusoe was seeking from Goldman Sachs in the first place, that was to buy AMD chips all along? That's right. It's to buy the AMD chips and the equipment that goes around them. And it's also collateralized by the chips so that ultimately, you know, if things went south, the lenders would be able to seize those chips and sell them or do something else with them. So basically, so basically, Crusoe is saying, hey, we're taking out the loan to buy the chips. AMD is saying, we know you're taking out this loan. we're going to give you the chips and you're going to pay us with the cash from the loan for the chips.

27:55But in the event that you can't live up to the requirements of the loan or the interest payments, we will help you rent out the chips because we know there's so much demand and we'll use that revenue essentially to help you pay off the loan in the worst case scenario. But this is the whole backstop idea that they're helping them with. Yeah, basically, you know, AMD ultimately is trying to grow sales and grow usage of their chips. And, you know, a lot of that will probably come from smaller companies. And it's kind of hard sometimes to predict where exactly that demand is going to come from. You know, these companies are not signing five-year take-or-pay contracts, like some of the big cloud companies like Microsoft might be.

28:47And so that's also part of this idea is that by AMD sort of guaranteeing the usage in the end, that allows Crusoe to feel a bit more liberty to go out and try to sell these to smaller customers that might not be the obvious big customers for these chips to start. So where is AMD taking on risk in this equation? Yeah, the main risk for AMD is, you know, if Crusoe can't really find other people to rent these chips, then AMD will, you know, be stuck with, you know, a larger cloud bill to Crusoe than maybe it would have wanted. But, you know, ultimately that's in service of sales. sales. So, you know, it is sort of circular in that way.