Open AI ups its liquidity to $10 billion

Top News

• OpenAI’s new war chest includes debt: OpenAI has secured a $4 billion revolving line of credit, increasing its total liquidity to over $10 billion, following a recent funding round that valued the company at $157 billion. It may seem odd to want even more funding, having just raised $6.6 billion from major investors. But, while OpenAI brought in $300 million in revenue last month, the company is projecting to lose about $5 billion this year. It turns out that growing at the speed of light is extremely expensive, so we’ll see if this new capital is enough to keep them afloat.

• Venture capital cools in Q3: Global venture capital activity declined in Q3 2024, confirming that the year will be another weak period for venture investments and exits, according to the Pitchbook/NVCA Venture Monitor. Across all regions—including the U.S., Europe, Asia, and Latin America—there were decreases in deal counts, average deal sizes, fundraising, and exit values, with no region showing significant growth. Given the downturn, it may be safe to say that we don’t have high hopes for Q4.

• Initialized Capital resets: Initialized Capital is restructuring its team to adapt to current market conditions, as announced by managing partner Brett Gibson. The San Francisco-based venture firm has reduced its staff by approximately 36%, reportedly letting go of multiple team members, including managing partner Jennifer Wolf. Despite the downsizing, Initialized promoted three principals—Abdul Ly, Andrew Sather, and Zoe Perret—to partners, emphasizing a return to lean operations while continuing to support its portfolio companies.

Callout for Space Startups

I just got off a recording with the CEO of Radian Aerospace, a new TWiST500 company that I think has a real shot at dramatically lowering the cost of getting stuff into orbit. It’s a big challenge, but perhaps now is the time for spaceplanes to take flight. (Look for that chat on your podcast feeds early next week!)

What struck me during the chat was the idea of the current space economy, with a huge chunk of the costs ripped out. For example, what new types of satellites might we send up, if it costs a fraction of today’s prices to do so? What will happen in the realm of, say, private space stations?

To that end, I’m going to do a dig into space startups with new vigor, to make sure that the TWiST500 is correctly built up in the space domain. Names like Axiom Space probably need to go on, to join names like Albedo Space that are already on the list.

You know where this is going: I would love to hear from you. If you are building or funding new startups with an eye on space, reach out at [email protected]. Shout!

— Alex

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This Week in Startups

E2019: Jason and Alex begin by discussing the ILA strike and its impact on global ports, followed by an analysis of how technology is increasing efficiency in port operations. They explore the relationship between labor, supply chain vulnerabilities, and unions, digging into the future of port automation and union demands. They also cover startup opportunities in port automation, broader societal impacts of labor changes, and the role of technology in reshaping employment. The show finishes it off with venture capital trends, including CRV's $275M return, IPO market conditions, and OpenAI’s mega-round funding.

E2018: Another throwback to LIQUIDITY Summit 2024. Ben Choi discussed the Fund of Funds strategy, while Michael Downing focused on the challenges and opportunities for emerging manager funds. Then, Monique Woodard walked us through raising her first fund, navigating investor types, and the importance of building relationships for subsequent funds. She also explored strategies for identifying ideal LPs and leveraging a fund’s unique strengths for future growth.

E2017: Jason and Alex begin by discussing the AI regulation bill SB 1047 and its potential impact on the industry, followed by a broader look at AI regulation in California and industry leaders' reactions to the bill's veto. They also explore the concurrent technological supercycles, including AI, self-driving cars, and fusion, before moving into topics like startup success, OpenAI's valuation, and the future of AR/VR technologies.

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Founder University

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