OpenAI Nears Deal for $100B in Funding | Bloomberg Tech 2/19/2026

Key Concepts

• OpenAI Funding: A new funding round potentially exceeding $100 billion, valuing OpenAI at $850 billion post-money. Key investors include Amazon, SoftBank, NVIDIA, and Microsoft.
• AI Infrastructure: The increasing demand for compute power and data centers to support AI development, driving investment in energy and related infrastructure.
• Meta/Instagram Trial: A landmark lawsuit alleging harm to teenagers due to Instagram’s design and features, with Mark Zuckerberg’s testimony being a key component.
• Warner Bros. Discovery Sale: Potential sale to Netflix or Paramount SkyDance facing scrutiny from the DOJ regarding its impact on theater chains.
• Microsoft & OpenAI Partnership: The evolving relationship between Microsoft and OpenAI, with Microsoft diversifying its AI partnerships while maintaining a critical connection with OpenAI.
• ByteDance AI Expansion: ByteDance’s increased hiring in the US for its AI division, despite ongoing national security concerns.

OpenAI Secures Massive Funding Round

OpenAI is nearing the completion of the first phase of a new funding round projected to exceed $100 billion, potentially boosting its post-money valuation to $850 billion. This initial phase involves strategic investors, including Amazon (potentially investing up to $50 billion), SoftBank (up to $30 billion), NVIDIA, and Microsoft. A second phase will target venture capitalists and other financial investors. SoftBank’s stock jumped 4% overnight following the news, though it later closed down 2.6%.

The deal isn’t straightforward. Amazon’s investment includes an expansion of their cloud computing partnership, with OpenAI utilizing Amazon’s cloud services and chips for development. The pre-money valuation is currently estimated around $730 billion, but the post-money valuation could reach $850 billion with the full funding round. OpenAI is “compute constrained,” meaning its development is limited by access to sufficient computing power, driving the need for this investment. The company has ambitious hardware plans, including building out data centers (“Stargate”) to support its growing AI models and its pursuit of Artificial General Intelligence (AGI).

AI Infrastructure Demand & Energy Implications

The influx of capital into OpenAI highlights the escalating demand for AI infrastructure. Rob Joiner, Senior Portfolio Manager, emphasized that AI fundamentally requires both data and energy. Investment will flow into data storage, cabling, liquid cooling, and the construction of more data centers. Furthermore, the need for electricity to power these data centers is driving investment in electrification infrastructure.

A key point raised was the potential inflationary impact of data center buildout, with Mary Daly of the Federal Reserve Bank of San Francisco noting the issue. However, hyperscalers are taking on the capital burden of modernizing the grid, potentially lowering wholesale electricity prices. Companies like Williams Company are building electric generation to support data centers, aiming to avoid passing the cost onto retail consumers. The goal is for hyperscalers to bear the cost of electricity for AI development, preventing broader inflation.

Meta Faces Scrutiny in Teen Addiction Trial

Mark Zuckerberg testified in a landmark trial concerning allegations that Instagram is addictive and harmful to teenagers. He stated that enforcing Instagram’s age limits is “very difficult,” particularly for users without driver’s licenses. He suggested that phone manufacturers like Apple should play a greater role in age verification. Documents presented during the trial revealed internal discussions about the unenforceability of age policies and concerns about prioritizing user engagement.

The plaintiffs argue that Meta knowingly designed features that exploit vulnerabilities in young users. Meta maintains that the plaintiffs faced challenges prior to using social media and that they are committed to supporting young people. The trial is one of over 3,000 similar lawsuits and is being closely watched by regulators and policymakers.

Warner Bros. Discovery Sale Under DOJ Scrutiny

The Department of Justice is investigating the potential impact of a sale of Warner Bros. Discovery to either Netflix or Paramount SkyDance on theater chains. Bloomberg Intelligence suggests Netflix should reconsider the acquisition, citing integration risks, increased leverage (potentially reaching four times leverage), and a shift towards greater dependence on Hollywood. Netflix’s stock has fallen over 30% since the deal talks began. The acquisition would increase Netflix’s reliance on Hollywood content, potentially diminishing its strength in international markets and local content creation.

Microsoft’s Evolving OpenAI Relationship

Microsoft President Brad Smith affirmed the continued importance of the partnership with OpenAI, despite diversifying its AI collaborations with companies like Anthropic and developing its own models. He emphasized that the partnership was crucial to the emergence of generative AI, with OpenAI creating groundbreaking models and Microsoft providing the necessary compute infrastructure.

Smith acknowledged that the relationship is less exclusive than it once was, but remains “imperative” for Microsoft. He also highlighted the growing usage of Microsoft’s Copilot AI assistant, indicating continued investment and development in the technology.

ByteDance Expands US AI Hiring

ByteDance, the parent company of TikTok, is significantly expanding its AI division in the US, with nearly 100 open roles in California and Washington. These roles span a wide range of AI disciplines, including model development, data science, and even research in fields like biology and chemistry, suggesting an expansion beyond social media into areas like drug discovery. This move comes amidst ongoing US national security concerns and ByteDance’s efforts to address those concerns through a deal to sell parts of its US TikTok business to non-Chinese owners.

Conclusion

The tech landscape is undergoing rapid transformation, driven by the explosive growth of AI. OpenAI’s massive funding round underscores the immense investment flowing into the sector, while the challenges faced by Meta and Warner Bros. Discovery highlight the regulatory and strategic complexities of navigating this new era. Microsoft’s evolving AI strategy and ByteDance’s US expansion demonstrate the competitive dynamics at play, as companies race to secure their position in the future of artificial intelligence. The need for robust infrastructure, particularly in energy, is becoming increasingly critical to support this growth.