AI Daily: OpenAI close to finalizing funding valuing company at $300B

Catch up on the top artificial intelligence news and commentary by Wall Street analysts on publicly traded companies in the space with this daily recap compiled by The Fly:

CHIP SHORTAGE: Chinese server maker H3C has warned of depleting inventory of Nvidia’s (NVDA) H20 chips, the most advanced AI processor legally available domestically under U.S. export controls, Reuters reports, citing a client notice seen by the publication. “H20’s international supply chain faces significant uncertainties,” the company said in the notice.

VALUED AT $300B: Microsoft (MSFT)-backed OpenAI is close to completing a $40B funding round that would value the company at $300B, Bloomberg’s Kate Clark, Katie Roof, Gillian Tan, and Shirin Ghaffary report, citing people familiar with the matter. Softbank (SFTBY) led round includes Magnetar Capital, Coatue Management, Founders Fund, and Altimeter Capital as investors, the report states, also noting that the round’s implied valuation is up from $157B when the company last raised funds in October.

REVENUE TO TRIPLE: Microsoft-backed OpenAI anticipates more than tripling its revenue in 2025 to $12.7B, driven by the strength of its paid artificial intelligence software, Bloomberg’s Bailey Lipschultz and Shirin Ghaffary report, citing a person familiar with the matter. The company generated $3.7B in annual revenue a year ago and expects revenue to continuing growing at a fast clip, potentially more than doubling in 2026 to $29.4B, the authors note.

EXPORT RESTRICTIONS: The U.S. has adds export restrictions to 80 organizations, primarily targeting Chinese companies, including server maker Nettrix and clients of Nvidia, Intel (INTC), and AMD (AMD), over security concerns, The New York Times’ Ana Swanson reports. The Trump administration added 54 companies and organizations from China to the entity list on Tuesday, as well as more than two dozen from Iran, Pakistan, South Africa, the United Arab Emirates and Taiwan, according to the report.

LIMITED TRACTION IN AI: Jefferies downgraded AMD to Hold from Buy with a price target of $120, down from $135. The firm cites the company’s “limited traction” in artificial intelligence, its belief Street estimates are too high, and expectations of mounting competition from Intel for the downgrade. Jefferies’ benchmarking report suggests real-world throughput of Nvidia’s H200 across a range of open-source models is substantially higher than AMD’s MI300x, Jefferies tells investors in a research note. The firm believes the results underscore the importance of Nvidia’s mature software stack for managing GPU efficiencies, and says this gap will widen as system performance becomes more important. AMD has “considerable ground to cover” before its products can compete with Nvidia, Jefferies contends.

FLAGSHIP AI MODEL: Alibaba Cloud (BABA) has launched Qwen2.5-Omni-7B, a unified end-to-end multimodal model in the Qwen series. “Uniquely designed for comprehensive multimodal perception, it can process diverse inputs, including text, images, audio, and videos, while generating real-time text and natural speech responses,” the company said. “This sets a new standard for optimal deployable multimodal AI for edge devices like mobile phones and laptops. Despite its compact 7B-parameter design, Qwen2.5-Omni-7B delivers uncompromised performance and powerful multimodal capabilities. This unique combination makes it the perfect foundation for developing agile, cost-effective AI agents that deliver tangible value, especially intelligent voice applications. For example, the model could be leveraged to transform lives by helping visually impaired users navigate environments through real-time audio descriptions, offering step-by-step cooking guidance by analyzing video ingredients, or powering intelligent customer service dialogues that really understand customer needs.”