Exclusive-OpenAI co-founder Sutskever's SSI in talks to be valued at $20 billion, sources say

By Kenrick Cai, Krystal Hu and Anna Tong

(Reuters) - Safe Superintelligence, an artificial intelligence startup co-founded by OpenAI's former chief scientist Ilya Sutskever last year, is in talks to raise funding at a valuation of at least $20 billion, four sources told Reuters.

That would quadruple the company's $5 billion valuation from its last funding round in September, when it raised $1 billion from five investors including Sequoia Capital, Andreessen Horowitz, and DST Global.

SSI's fundraising tests the ability of high-profile AI ventures to continue to command premium valuations following an industry-wide reappraisal prompted by Chinese startup DeepSeek's unveiling of its low-cost AI last month. 

SSI, which has not generated any revenue, has said its mission is to develop "safe superintelligence" that is smarter than humans while aligned with human interests.

The company's conversations with existing and new investors are still in the early stages and terms could still change, the sources said this week, who requested anonymity to discuss private matters. It was not clear how much money SSI was seeking to raise. 

SSI, which was founded in June with offices in Palo Alto and Tel Aviv, did not respond to requests for comment. Sutskever's co-founders are Daniel Gross, who previously led AI initiatives at Apple, and Daniel Levy, a former OpenAI researcher.

SECRETIVE STARTUP

Beyond the cursory explanation of the company's goals for safe AI, not much is known about the secretive startup or its work. What has fueled interest among investors is Sutskever's reputation and the novel approach he has said his team is working on.

In AI circles, he is a legend for his contributions to breakthroughs that underpin the investment frenzy in generative AI. He was an early advocate of scaling, which means dedicating vast amounts of computing power and data to refining AI models.

That concept was the foundation that led to generative AI advances like OpenAI's ChatGPT, setting the course for a wave of tens of billions of dollars in investment in chips, data centers and energy.

Sutskever was also early in seeing the potential ceiling of such an approach due to the dwindling pool of available data to train models. Recognizing the importance of putting in resources in the inference stage, or the stage of AI when a trained model draws conclusions, he founded the team that worked on what would become OpenAI's latest series of reasoning models, setting a new research direction that has been widely followed. 

Making clear to investors not to expect short-term windfalls, SSI has said it intends to "scale in peace" by insulating its progress from short-term commercial pressures. 

This sets it apart from other AI labs, including OpenAI which started as a nonprofit but shifted focus to commercial products after ChatGPT unexpectedly took off in 2022. It generated nearly $4 billion in revenue last year and forecast $11.6 billion in revenue this year.

Little is publicly known about SSI's approach. In a Reuters interview last year Sutskever, 38, said SSI was pursuing a new research direction, calling it "a new mountain to climb", but shared few other details.

Fundraising for the so-called foundation model companies shown no signs of slowing down. OpenAI is in talks to double its valuation to $300 billion, while rival Anthropic is finalizing a funding round that would value it at $60 billion.

Still, investors face fresh questions about their outsized bet with the disruption from Chinese startup DeepSeek, which developed open-source models that rivaled the top U.S. AI models at a fraction of the cost.

The popularity of DeepSeek knocked nearly $600 billion off Nvidia's market capitalization in late January. But it has not deterred big tech from plowing ever higher investment in their AI infrastructures this year, according to recent earnings statements. 

(Reporting by Krystal Hu in New York, Kenrick Cai and Anna Tong in San Francisco; editing by Kenneth Li and Nia Williams)