An update to More Magic Math from OpenAI

The final mad dash to IPO is on for the big AI companies. SpaceX, OpenAI, and Anthropic have all made their intentions clear. And nothing could be more obvious about OpenAI’s intent than today’s new funding announcement. A few things have changed since I wrote that piece. Some confirm my thesis, and one surprise, though not really.

So, the company says the round closed. $122 billion in committed capital, up from the $110 billion announced in February. Does committed mean money has passed the transom? We won’t know. What we do know is that at a post-money valuation of $852 billion, the anchors are Amazon, Nvidia, and SoftBank. Microsoft participated again, though not clear for how much. The additional $12 billion came from a who’s who of institutional money, including a16z, Sequoia, BlackRock, Blackstone, Fidelity, Temasek, D1, and Dragoneer. The FOMO gang!

So many brand-name investors show up at the last minute because none of them want to miss out on the sweet IPO pop. It surely will win them points with their own (limited partner) investors. I guess FOMO is also an affliction for the super rich.

By the way, nothing puts more in “t “less is more,” than more itself. In 2024, OpenAI raised $6.6 billion and sold about 4 percent of the company. In 2026, they raised $122 billion, twenty times more, by selling roughly 14 percent. Existing insiders and early employees must be in heaven.

To be clear, the circular financing problem hasn’t gone away. Amazon’s $50 billion is tied to an eight-year AWS contract. Nvidia’s contribution is compute, not cash. When I wrote about this in March, it was just an observation. Now it has a name. Bloomberg, Reuters, and others are now calling it “circular financing.”

OpenAI says it now has a $4.7 billion credit line from JPMorgan, Goldman Sachs, Citi, Morgan Stanley, and Wells Fargo. That’s not a lending syndicate. That’s an IPO underwriter roster auditioning for the job. It reminds me of those lining up outside Don Corleone’s room on his daughter’s wedding day. The credit facility is the gift they bring to get in the room.

Now let’s talk about the fix. The $3 billion in investments from individual investors. Axios reports that they are customers of three of the largest banks. Wait, the same three large banks that extended the credit facility and want to be part of the IPO underwriting syndicate. More circular economy at work.

OpenAI CFO Sarah Friar told Axios, “We are really trying to take to heart our mission, which is AGI for the benefit of humanity and thinking about access. Not just access to the technology, but also access to the economic upside that it’s driving.” That’s a nice line. It’s also an IPO marketing strategy.

OpenAI said it will be included in several ARK Invest ETFs. Cathie Wood, who previously invested in OpenAI through her venture arm, now gets to channel her retail base into pre-IPO OpenAI shares. Think about what that is. A private company, not yet public, getting into retail ETFs. That’s a new thing. It’s smart, too. You create demand before the IPO. You distribute the story. You make millions of people feel like they have skin in the game before you even file. That’s the fix.

ARK is overrated, to put it mildly. ARK’s flagship fund peaked in February 2021, then fell 75 percent. Five years later, a thousand dollars invested then is worth about $573 today. And ARK is the vehicle OpenAI chose to democratize the upside. Make of that what you will.

One last thing. OpenAI is quietly pivoting, shutting down Sora, its much-hyped video app, and concentrating resources on a “superapp” for developers and business users, with coding assistants at the center. Why? Because enterprise is exactly where Anthropic is eating their lunch. The $122 billion has bought more time to beat the competition. And did you notice that CFO Friar is doing all the press versus Sam?

You focus this hard because you want to go public. Fast. After all, you don’t want to be the one without a chair when the music stops. Your move, Dario!

Previously on this topic:

• More Magic Math from OpenAI?
• OpenAI Has New Focus (on the IPO)
• $110 Billion in Name Only
• The Debt Beneath the Dream

“A newspaper is not only a collective propagandist and a collective agitator, it is also a collective organiser.” — Vladimir Lenin

In 1902, Lenin argued that his revolution needed a newspaper of its own, and that newspaper was (unironically) named Pravda, which means truth in Russian.

“The standard communications playbook just doesn’t apply to us. We’re not a typical company. We’re driving a really big technological shift.” — Fidji Simo, 2026

Simo, OpenAI’s CEO of Applications, explained this to OpenAI staff as to why OpenAI had just bought TBPN. Different century. Same logic to explain an emerging new socioeconomic order, a new post-revolution reality.

To recap, OpenAI, weeks if not months before its public offering, has acquired the Technology Business Programming Network (TBPN). It is a daily, three-hour live tech talk show hosted by founders Jordi Hays and John Coogan. The show had 58,000 YouTube subscribers, $5 million in revenue last year, and a cult following in Silicon Valley. It was profitable, had no outside investors, and was growing fast. As a former media person, any media exit is a good exit. Congratulations to the founders.

Now let’s dig into what OpenAI really bought and why.

Think of TBPN as a room. A room where people in tech come and talk openly, without having to worry about the antagonistic queries that big media is often posing them. They go because it feels like peers talking, not press interrogating.

If you lived through Internet 1.0, CNBC’s morning show had the same vibe. ESPN’s SportsCenter did the same for the cable sports revolution. They don’t speak to power. They amplify power. TBPN made that playbook its own.

The best part of the announcement is where TBPN sits inside the OpenAI org and who it reports to. The show sits under “strategy” (and not communications) and will report to Chris Lehane. He is OpenAI’s chief political operative, the man associated with coining “vast right-wing conspiracy” as a deflection tactic during the Clinton White House years, who built Fairshake, the crypto super PAC that spent hundreds of millions targeting anti-crypto candidates in 2024.

You don’t put an editorially independent media property under your political operative. That’s not a media strategy. That is part of overall strategy. But they still have to sell it as keeping it editorially independent. Pravda was technically editorially independent too.

Anyway, maybe I have lost my rose-tinted glasses, but when a company says “do no evil,” you know what they are going to do. And if a press release mentions editorial independence four times, you know where that is going. And if you have to invent a new phrase, “Editorial Independence Covenant,” then I don’t really need to spell it out for you.

“The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society.” — Edward Bernays, Propaganda, 1928

Bernays, who was Sigmund Freud’s nephew, invented the PR industry. He thought of it as a key part of corporate design. He was hired by corporations such as United Fruit and American Tobacco to do exactly what OpenAI is doing now. Build the perception layer around a product by presenting it as a massive societal shift.

The Soviet term was agitprop. The Silicon Valley term is earned media strategy. A century apart, history still rhymes.

Related Reading

• OpenAI: The Fix Is In — How OpenAI is engineering its IPO narrative through circular financing and retail ETFs.
• OpenAI Has New Focus (on the IPO) — On Simo, Facebook-style engagement loops, and the real game being played.
• More Magic Math from OpenAI — The PE deals, the JV structure, and why the real product is the IPO prospectus.
• The New Announcement Economy — How OpenAI mastered the press release as a capital-raising instrument.