Plus, CoreWeave’s much-anticipated IPO flounders. And, President Trump adds Nikola’s founder to his raft of pardons. Victoria Craig hosts.
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[00:00:01] Here's your TNB Tech Minute for Friday, March 28th. I'm Victoria Craig for The Wall Street Journal. We're exclusively reporting that ChatGPT's parent company, OpenAI, is finalizing a $40 billion funding round that would be one of the biggest startup fundraisers of all time. But there's a catch. The nonprofit company must successfully restructure itself into a for-profit one.
[00:00:25] If it fails to do so, lead investor SoftBank can shrink the funding round's size by half. Pressure has mounted for such a transition after Sam Altman was removed briefly as CEO in late 2023. At the time, OpenAI's board said Altman wasn't consistently honest in his communications. That led investors to argue that it was the nonprofit structure that carried too many risks. News Corp., owner of The Wall Street Journal, has a content licensing partnership with OpenAI.
[00:00:56] Elsewhere, what was supposed to be the flashiest stock market debut of the year turned into a high-profile stumble. CoreWeave, which rents access to its stash of NVIDIA servers, made its debut on the NASDAQ stock exchange today. It began trading about four hours after the broader market opened and just under its IPO price of $40. Though it passed that threshold during the remainder of the session, it traded well below the $47 to $55 range the company targeted during its roadshow for investors.
[00:01:26] The lackluster start for CoreWeave is a sign of cooling market demand for AI-focused startups. And it illustrates the difficulty for companies hoping to make their way to the public markets this year. WSJ's Cori Driebush explains the worry for investors. There are company-specific issues. And investors said, no, we don't really want to pay that much. And they also had concerns about the sustainability of the AI boom.
[00:01:54] And obviously companies right now are spending hundreds of billions of dollars on AI. But how sustainable is that? CoreWeave shares ended Friday's trading session. Little changed. Finally, President Trump took the cap off his pardon pen today, this time for Trevor Milton, the founder of the now bankrupt electric truck maker Nikola. Milton was convicted of securities and wire fraud in 2022.
[00:02:17] Prosecutors portrayed him as a con man who pulled the wool over investors' eyes by being untruthful about Nikola's sales and the real performance ability of its vehicles. Milton maintained his innocence and appealed his conviction. He was sentenced to four years in prison, but has been out on bond during the appeal. For a deeper dive into what's happening in tech, check out Monday's Tech News Briefing podcast. The End