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Debt <keyword id="19929240" type="General" weightage="20" keywordseo="mutual-funds" source="keywords">mutual funds</keyword> saw massive outflows of Rs 1,13,833.95 crore in September 2024. Liquid funds made up about 50% of this, witnessing outflows of Rs 72,665.97 crore. This was followed by money market funds, which lost Rs 23,420.84 crore during the month. Investors continued to repose strong faith in <keyword id="20300870" type="General" weightage="20" keywordseo="equity-mutual-funds" source="keywords">equity mutual funds</keyword>, which saw inflows worth Rs 34,419.26 crore during the month. The momentum in <keyword id="20444306" type="General" weightage="20" keywordseo="sectoral-funds" source="keywords">sectoral funds</keyword> also continued, with them raking in Rs 13,254.63 crore in September. During the month, 4 new sectoral schemes were launched, which gathered a total of Rs 7,842 crore. This was the 43rd consecutive month for positive equities inflows, beginning March 2021. Multi-cap and large and mid-cap funds saw inflows of about Rs 3,500 crore last month, followed by flexi cap funds, which raked in Rs 3,214.57 crore. Amidst ongoing geopolitical concerns, investors chose to stay away from slightly risky investment avenues such as arbitrage funds, which lost Rs 3,531.93 crore during September. Arbitrage funds make money from price differences, which is generated by buying and selling similar securities simultaneously across different markets. Multi-asset allocation funds saw inflows worth Rs 4,070.37 crore during the month. Index funds and gold ETFs also saw funds worth Rs 1,960.29 crore and Rs 1,232.99 crore flowing in, respectively. September saw 13 new index funds launches, which amassed Rs 3,656 crore. All in all, 27 <keyword id="20867320" type="General" weightage="20" keywordseo="new-schemes" source="keywords">new schemes</keyword> were launched last month, which saw inflows worth Rs 14,575 crore. <h2>SIP accounts, AUM at all-time high</h2>The industry's net AUM (assets under management) stood at Rs 67,09,259.24 crores, with mutual fund folios also touching an all-time high of 21,05,15,684. The retail AUM, which comprises of equity, hybrid and solution oriented schemes, also touched an all-time high of Rs 40,44,098 crore, up from Rs 39,27,594 crore in August 2024. Inflows in SIP (Systematic Investment Plans) remained resilient, and witnessed an all-time high, with the number of new SIPs registered in September registered at 66,38,857. The <keyword id="20876064" type="General" weightage="20" keywordseo="SIP-AUM" source="keywords">SIP AUM</keyword> was also at its highest ever, at Rs 13,81,703.94 crores for September. This stood at Rs 13,38,944.73 crores for August 2024 The number of SIP accounts were also at their highest ever at 9,87,44,171, along with SIP contribution, which recorded an all-time high of Rs 24,508.73 crores last month. The MF industry also reached the milestone of having 5,01,22,609 unique investors in September.

Sectoral funds continue lapping up investor money, debt funds see massive outflows in September 2024, shows AMFI data

The deluge of funds in sectoral, or <keyword id="20296225" type="General" weightage="20" keywordseo="Thematic-Funds" source="keywords">thematic funds</keyword> continued unabashed in September, with investors pouring in Rs 13,254.63 crore via 183 schemes into this category, as <keyword id="20090036" type="General" weightage="20" keywordseo="AMFI" source="keywords" meta.keywordsubtype="org" meta.entityname="AMFI" meta.hostid="261" meta.entityid="AMFI">AMFI</keyword> data showed. In August too, investors had put in Rs 18,117.18 crore via 179 schemes here. The trend has been going strong since July, 2024, which saw <keyword id="20444306" type="General" weightage="100" keywordseo="Sectoral-Funds" source="keywords">sectoral funds</keyword> garner Rs 18,386.35 crores via 174 schemes. In August, 5 new thematic funds were launched on the momentum, which raised Rs 10,202 crore. Last month saw the launch of 4 new sectoral schemes, which garnered around Rs 8,000 crore. However, inflows into <keyword id="21366551" type="General" weightage="20" keywordseo="Equity-Schemes" source="keywords">equity schemes</keyword> fell by 10% in September to Rs 34,419 crore, as compared to Rs 38,239 crore in August 2024. Between April and June 2024, equity <keyword id="19929240" type="General" weightage="20" keywordseo="Mutual-Funds" source="keywords">mutual funds</keyword> had seen a total inflow of Rs 94,222.27 crore, out of which inflows in sectoral funds (Rs 46,731.17 crore) alone were a whopping 50%. While the quantum of inflow in equities, and sectoral funds certainly seems to have tapered down a bit, it continues to remain significantly strong, indicating heavy <keyword id="20354507" type="General" weightage="20" keywordseo="Investor-Interest" source="keywords">investor interest</keyword> in this largely risky segment. Over the last year, AMCs have been pumping out more and more NFOs in this space in a bid to get a bigger chunk of investor's money, and also regulations restrict them from launching new schemes under other categories. However, with the ongoing geopolitical concerns in Middle East, and rising prices of crude oil, the equity markets are set for volatile, uncertain times ahead. However. thematic funds have had a good run so far this year, with YTD (yield to date) of 28.69%, and returns worth 44.71% over the past year. Says Deepak Ramaraju, Senior Fund Manager, Shriram AMC, "On the prima facie, it looks like investors are concerned about the valuation, increasing geo-political uncertainty and moderation in earnings and hence, we have seen redemption from funds. But we will have to wait for how the global events play out – like the Chinese stimulus, the Fed Decision and the RBI’s MPC policy stance in the months to come". As such, you should think twice and carefully assess the risks involved before dipping your hands in the gush of sectoral funds right now. While they may be all the rage, identifying the right sector or theme at the right time is a job best done by professionals. <h2>Don't ignore the risks involved</h2>Siddharth Alok, AVP Investments, Multi Ark Wealth-Epsilon Money explains that sectoral funds come with high risk, since they are more vulnerable to sector-specific downturns. This might not suit the risk palate of many investors. "All markets have cycles, where some sectors naturally outperform while some underperform in the short to medium term. For instance, industrial and consumer discretionary sectors may perform well in a growing economy, while defensive sectors like utilities or healthcare may perform better during downturns". "To make the most of your investments in sectoral funds, it is essential to time your entry and exit in these sectors, which is a difficult job for a regular investor", he continued. In order to maximise your returns in thematic funds, either investors i.e. you should understand the dynamics of the underlying sector or theme, or you should have qualified and experienced advisors who can help you take the right decision with regards to such investments. As a matter of fact, you should approach any new funds only after comparing them with similar existing offerings and ensuring their aptness in your portfolio. As an astute investor, you should understand that such funds offer a very high-risk high return investment proposition and may not fit in the portfolio of every investor. Investing in every <keyword id="20498936" type="General" weightage="20" keywordseo="NFO" source="keywords">NFO</keyword> (New Fund Offering) without assessing the sector's viability and future growth, merely on the back of its current hype is unadvisable.

The newest fad in mutual fund multiverse: Sectoral Funds. Here's why you should not over-invest in them

The ongoing <keyword id="20168812" type="General" weightage="20" keywordseo="sell-off" source="keywords">sell-off</keyword> by <keyword id="19900795" type="General" weightage="20" keywordseo="foreign-investors" source="keywords">foreign investors</keyword> continues to loom large on <keyword id="19991358" type="General" weightage="20" keywordseo="Indian-markets" source="keywords">Indian markets</keyword>. In October so far, <keyword id="19950996" type="General" weightage="100" keywordseo="FIIs" source="keywords">FIIs</keyword> (foreign institutional investors) have already withdrawn Rs 74,732.20 crores. Not for a single day this month have FIIs poured money into <keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword>. The sell-off started on October 1, when foreign investors withdrew Rs 5,579.35 crore. The highest withdrawal of this month came on October 3. 2024, when FIIs sold Rs 15,243.27 crore worth of assets. Yesterday, i.e. on October 17th, FIIs pulled out Rs 7,421.40 crore from the markets. Experts state that FIIs are continuously putting pressure on Indian stocks, but the situation is expected to improve in the coming weeks with a sharp recovery anticipated. "We remain optimistic as the FII selling may have crossed the half way mark already and as it tones down, the domestic flows will help a recovery. When the recovery happens it will sharp and concentrated, giving long term investors motivation to stay put during the harrowing volatility of a roller coaster market that has repeatedly tested support levels but remains oversold, hence ripe for a bounce sometime in the next few weeks" said Ajay Bagga, Banking and Market Expert to ANI. Between January and October 2024, foreign investors have invested a net of 1,87,298 crore in India. This year, apart from the current sell-off, January, April and May also saw <keyword id="23593694" type="General" weightage="20" keywordseo="investment-outflows" source="keywords">investment outflows</keyword> by FIIs. The intense selloff comes right after September, when foreign investors invested a record Rs 93,538 crore in the Indian markets. June, July and August 2024 had also seen positive inflows from foreign investors of about Rs 41,757 crore, Rs 48,796 crore and Rs 25,493 crore respectively. However, a resilient, strong domestic investor base is keeping Indian markets afloat. <keyword id="21714171" type="General" weightage="20" keywordseo="DIIs" source="keywords">DIIs</keyword> (domestic institutional investors) have been consistent buyers throughout this month, largely balancing the outflows prompted by FIIs. In October so far, DIIs have invested about Rs 68,961.37 crore in the market, with the highest monthly inflow coming in on October 7th. While DIIs invested Rs 13,245.12 crore in Indian markets on that day, foreign investors withdrew Rs 8,293.41 crore. Yesterday i.e. on October 17, 2024, DIIs invested Rs 4,979.83 crore in the markets. At present, experts note that DIIs are flush with cash at the moment, with <keyword id="20052797" type="General" weightage="20" keywordseo="mutual-fund-inflows" source="keywords">mutual fund inflows</keyword> reaching an all-time high of Rs 24,509 crore in September 2024, a record 52.78% jump from the corresponding year ago period, where they stood at Rs 16,042 crore. Generally, keeping around 3-5% of their assets in cash is considered an acceptable practice amongst mutual fund houses. As per reports, mutual funds are currently in possession of Rs 1.86 lakh crore worth of cash, which constitutes 5.03% of their total AUM as of September 2024.

Exodus of foreign investors from Indian markets continues unabated in October. But DIIs are holding the fort steady

Both mid-cap and small-cap mutual fund schemes have continued to attract significant investor interest, having garnered about Rs 30,350 crore in inflows during the April-September period of the current financial year. Last year, as data from <keyword id="6359050" type="General" weightage="20" keywordseo="AMFI" source="Orion">AMFI</keyword> showed, the total inflows in both these segments during the same period were only marginally higher at Rs 32,924 crore. Data from Value Research suggests that mid-cap funds have generated 46.25% returns over the past year, while small-cap funds have yielded returns worth 44.17% during the same time. This is far better than their 3-year returns, which stand at 20.67% for midcaps and 21.64% for smallcaps. The returns further moderate over 5 years to 32.44% for small caps and 27.94% for midcaps. Inflows in mid- and small-cap funds have only grown from strength to strength during the current year, despite market watchdog <keyword id="35210" type="General" weightage="20" keywordseo="SEBI" source="Orion">SEBI</keyword> repeatedly highlighting the high risks both these categories entail. Between January and March 2024, small-cap funds saw inflows worth Rs 6,085.27 crore, while mid-cap funds were a little behind, garnering inflows worth Rs 4,887.05 crore. Between April and June this year, small-caps saw inflows worth Rs 7,196.8 crore. At the same time, midcaps saw inflows worth Rs 6,926.60 crore. In line with this increase in inflows, the number of investors (folios) in the two schemes shot up by 1.32 crore year-on-year to nearly 4 crore in the six-month period ended September 30, 2024. Since 2020, the small-cap universe (i.e., companies with a market cap of less than Rs 2000 crores) has grown nearly fourfold, offering investors a wide range of investment opportunities. Data from Trust Mutual Fund also shows that small-cap funds have also emerged as great generators of long-term wealth. Between August 2014 and August 2024, the <keyword id="6354813" type="General" weightage="20" keywordseo="Nifty" source="Orion">Nifty</keyword> 100 total return index (TRI) has yielded a CAGR of 14.7%. In contrast, the Nifty smallcap 250 TRI has registered a CAGR of 18.2% "Small caps will continue to grow at a faster rate for years to come. I expect the inflows to continue as Indians want to invest in the high-growth sectors. Small-cap funds should be seen as an integral part of one's portfolio allocation and not a tactical play," Trust Mutual Fund CEO Sandeep Bagla told PTI. Individually, mid-cap funds saw an inflow of Rs 14,756 crore, and small-cap funds attracted Rs 15,586 crore in the first half of FY25. This aggregates the total inflow to Rs 30,342 crore, the data showed. In addition, the stress test in March 2024 has also played a role, reinforcing confidence by ensuring that fund managers are prepared to handle market volatility, Feroze Azeez, Deputy CEO, Anand Rathi Wealth Ltd, said. "With the mid-cap and small-cap segments projected to grow at 20 percent and 25 percent, respectively, in FY25, we expect inflows to remain strong, especially as SIP inflows continue to hit new peaks," he told media.

Investors pour in Rs 30,350 crore in mid and small cap funds in the first half of 2024

Tensions in Middle-East are rapidly inching closer to their zenith, with Iran firing about 200 ballistic missiles at Israel late yesterday night. In response today, the Indian markets witnessed their worst decline in two months, with Sensex dipping around 1,769 points, or 2.1% to close at 82,497.10. <keyword id="19896381" type="General" weightage="20" keywordseo="Nifty" source="keywords">Nifty</keyword> followed suit and was also down by 2.1% to close the day at 25,250.10. As a result, about Rs 11 lakh crore were wiped off the market today. The decline was broad-based, with sectors like realty (dipped by over 4%) auto, and energy suffering the most. Broader indices also fell, losing nearly 2% each. The Hang Seng index, which had rallied over 14% during the last week, largely on the back of various stimulus measures announced by the central bank to stir consumption in the Chinese economy, also slumped around 1.47%. With the possibility of an all-out war between Iran and Israel looming on the horizon, threatening to happen sooner than later, markets are expected to remain volatile in near future. Even the India VIX, seen as a gauge of uncertainty and investor fear in the market, jumped over 9% during the day. The war could throw a huge spanner on India's crude oil import plans. As of August 2024, about 44.6% of India's crude oil imports came from <keyword id="19904316" type="General" weightage="20" keywordseo="middle-east" source="keywords">Middle East</keyword>. Israel has already promised significant retaliation, in response to Iran's attack in the days to come. And the strong possibility of a full-blown Israeli attack in Middle East, particularly major oil fields in Iran has sent the crude oil prices surging. Closer home, ONGC (Oil and Natural Gas Corporation) was amongst the biggest gainers on NSE today. <h2>Should Indian investors worry? </h2>But is the impending action in Middle-East the only reason behind today's drastic fall? Vishnu Kant Upadhyay, AVP, Research &amp; Advisory at Master Capital Services notes that while it plays a significant role, other factors are also at play. "Recent regulatory changes in the F&amp;O segment by SEBI is expected to impact trading volumes, as retail participation may decline due to the increased contract size and limits on weekly expiries. Meanwhile, strength in the Chinese market, following the People’s Bank of China (PBoC) stimulus package, has also diverted foreign investment to China, where valuations remain more attractive compared to India", he noted. But Upadhyay believes that the extension of losses in Indian markets wont last long. "From a technical perspective, as long as prices hold above the 25,250–25,100 zone, any decline could present an opportunity to build fresh long positions. A stock-specific approach is advisable, with sectors such as Oil, IT, PSU Banks, Metals, and Chemicals likely to outperform in the coming days", he adds. Shrikant Chouhan, Head Equity Research, Kotak Securities observes that as long as market is trading below 25,365/82,800, the weak sentiment is likely to continue. On the down side, it could slip till 25,150-25,025/82,200-82,000 as well. On the other side, one quick technical pullback is likely if the market succeeds to trade above 25,365/82,800. Above the same, it could bounce back till 25,475-25,500/83,100-83,300. The current market texture is volatile hence; level based trading would be the ideal strategy for the day traders. <h2><keyword id="20760178" type="General" weightage="20" keywordseo="mutual-fund-investors" source="keywords">Mutual fund investors</keyword>, stay put</h2>In the aftermath of a <keyword id="19968045" type="General" weightage="20" keywordseo="market-correction" source="keywords">market correction</keyword>, most mutual fund investors often face a critical decision- should they stop their SIPs (<keyword id="21047553" type="General" weightage="20" keywordseo="Systematic-Investment-Plans" source="keywords">Systematic Investment Plans</keyword>) or to view the downturn as a valuable opportunity to acquire more mutual fund units? By continuing SIPs during such downturns, investors can take advantage of 'rupee-cost averaging,' i.e. accumulating more units when prices are down. This approach not only lowers the average cost per unit, but also positions the portfolio for greater returns when the market eventually recovers, and softens the impact of short-term volatility. Swapnil Aggarwal, Director, VSRK Capital explains that alongside maintaining regular investments, revisiting your asset allocation is also essential in these turbulent times. A well-diversified portfolio, that balances equities with safer assets like bonds can withstand market fluctuations more effectively. You can consider shifting some investments into bond funds or other stable instruments, which can provide a cushion against further declines. <h2>What happens next? </h2>While the immediate impact of a market correction may lead to declines in the NAV (Net Asset Value) of mutual funds, disciplined investors can view this as a moment to reassess their strategies. Focusing on your <keyword id="20908416" type="General" weightage="20" keywordseo="long-term-financial-goals" source="keywords">long-term financial goals</keyword> will let you turn market volatility into opportunity! The market will remain keenly focused on the evolving situation in the Middle East. What will also be equally important are the US monthly jobs data due tomorrow, which could determine the size of Fed's next interest rate move in November.

Nifty, Sensex in freefall today as Iran mounts attack on Israel. Here's what experts think you should do

<ul class="summary-list"><li>The University of California, Berkeley, is the top producer of alumni starting tech companies.</li><li>Founded by Jeremy Fiance, The House Fund targets Berkeley-affiliated startups like Databricks.</li></ul>In the last year, tech investors have plowed tens of millions of dollars into Perplexity, the developer of a search engine built from scratch with artificial intelligence. The two-year-old startup <a target="_blank" class="" href="https://www.businessinsider.com/perplexity-raising-new-funding-generative-ai-2024">takes in cash like oxygen,</a> having raised <a target="_blank" class="" href="https://www.businessinsider.com/ai-startups-rapid-funding-rounds-2024-9">back-to-back funding rounds</a> just months apart, and is <a target="_blank" class="" href="https://www.wsj.com/tech/ai/ai-startup-perplexity-in-funding-talks-to-more-than-double-valuation-to-8-billion-54d36787">said to be in talks</a> to raise a fourth round that would value the startup at $8 billion.Landing a spot on Perplexity's cap table is fiercely competitive, making it all the more noteworthy that The House Fund, a bespoke venture capital firm born from the University of California, Berkeley's ecosystem, secured a place.In 2016, tech investor Jeremy Fiance set up a venture capital firm at his alma mater to invest in startups with ties to top-tier public schools. From an office across from the College of Computing, Data Science, and Society, investors at The House Fund scour their networks for students, faculty, and alumni working to build the next Perplexity, whose CEO Aravind Srinivas is a Berkeley alum, or Databricks, one of the <a target="_blank" class="" href="https://www.businessinsider.com/databricks-acquires-startup-lilac-ai-to-beef-up-its-llm-offerings-2024-3">world's most important data science firms</a> with a private valuation of $43 billion, started by a group of seven Berkeley researchers. The House Fund has backed both."There are only so many companies that matter every year, full stop, in venture," said Zachary Hargreaves, a managing partner at The House Fund. Each year, more firms are "birthed out of Berkeley."<div type="image" title="Two men looking relaxed smile for a photo against a black backdrop." height="2250" width="3000" msid="114433088" hostid="261" sizebytes="116306"></div>In early 2020, Hargreaves <a target="_blank" class="" href="https://www.businessinsider.com/30-rising-venture-capitalist-investors-silicon-valley-tech-2018-4">left Founders Fund</a>, where he worked closely with startups like SpaceX and Stemcentrx, to run his own playbook as an advisor and angel investor. During this period, an old classmate from Berkeley, Fiance, started asking his advice about which companies in the portfolio he should reinvest in."I was learning more and more about what The House Fund is from the outside in," Hargreaves said. "It feels very small but then from the inside out, it's actually very big in terms of the opportunity set."In the two years since Hargreaves went full-time, The House Fund has deployed over $125 million into companies. His move from Founders Fund to The House Fund hasn't been previously reported.Investors pay much attention to Stanford and the Massachusetts Institute of Technology for their conveyor belts of entrepreneurial talent. Neither have spawned quite as many startup founders in the last decade at Berkeley. According to <a target="_blank" class="" href="https://pitchbook.com/news/articles/pitchbook-university-rankings">PitchBook data</a>, Berkeley has the highest tally of alumni entrepreneurs who have raised venture capital of any public or private school worldwide.Hargreaves predicts that the group will grow as the use of artificial intelligence makes it cheaper and faster for students and alumni to spin up new businesses. "You can actually be three kids in a garage and launch pretty fierce products," he said.With Hargreaves on board, Fiance hopes to invest later in companies it previously backed. His hiring gives the firm the resources and knowledge to help founders shape their businesses into the next generation of Berkeley-born unicorns, as well as diligence them for potential follow-on financing. The House Fund said it can write checks up to $10 million.The House Fund has raised over $330 million from backers, including the Berkeley Endowment Management Company, UC Investments (the office that manages the working capital, retirement savings, and endowment funds for the University of California system), and Ahoy Capital, a boutique fund manager.Hargreaves put the firm's value add this way: "If we are on your cap table, we are a shortcut to anything Berkeley."

These tech investors are trawling UC Berkeley to fund the next Perplexity or Databricks

In recent years, <keyword id="19902194" type="General" weightage="20" keywordseo="Anil-Ambani" source="keywords">Anil Ambani</keyword>'s <keyword id="20479923" type="General" weightage="100" keywordseo="Reliance-Group" source="keywords" meta.keywordsubtype="org" meta.entityname="Reliance Group" meta.hostid="153" meta.entityid="Reliance Group">Reliance Group</keyword> has seen marquee firms being auctioned in insolvency proceedings and piling debt-fold businesses. But the group has, in the week gone by, made announcements that investors believe may mark its transformation. In three days -- from September 18 to September 20 -- the group announced it has turned into nearly zero debt and is implementing long-term fundraising plans that are said to solidify its financial position. <keyword id="20144587" type="General" weightage="20" keywordseo="Reliance-Infrastructure" source="keywords" meta.keywordsubtype="org" meta.entityname="Reliance Infrastructure" meta.hostid="153" meta.entityid="Reliance Infrastructure">Reliance Infrastructure</keyword>'s board approved <keyword id="20431799" type="General" weightage="20" keywordseo="fund-raising" source="keywords">fund raising</keyword> of up to Rs 6,000 crore via preferential issue and QIP, while <keyword id="20024191" type="General" weightage="20" keywordseo="Reliance-Power" source="keywords" meta.keywordsubtype="org" meta.entityname="Reliance Power" meta.hostid="153" meta.entityid="Reliance Power">Reliance Power</keyword> board is meeting on September 23 to consider and approve the fundraise via multiple routes. The speed at which Anil Ambani moved to clear the debt of his companies, and simultaneously announce and execute the fund raising plans for future expansion of his companies, has surprised the investors. Shares of both firms surged on stock markets. The announcement to invest Rs 1,100 crore by the promoters group in Anil Ambani's flagship company, Reliance Infrastructure, has further boosted the confidence of investors in the group's revival plans and its long-term growth story, investors said. Anil Ambani's twin strategy of <keyword id="21440133" type="General" weightage="20" keywordseo="debt-reduction" source="keywords">debt reduction</keyword>, coupled with fresh capital raising, has set the stage for a long-term transformation of the Reliance Group, they feel. Reliance Infrastructure's <keyword id="20000950" type="General" weightage="20" keywordseo="market-capitalisation" source="keywords">market capitalisation</keyword> by the end of this week surged nearly 50%, rising from Rs 8,500 crore to Rs 12,500 crore. Similarly, Reliance Power's market capitalisation increased over 25%, moving from Rs 11,500 crore to Rs 14,600 crore. Reliance Infra announced a significant reduction in standalone external debt, lowering it from Rs 3,831 crore to just Rs 475 crore. This was achieved by clearing outstanding dues to prominent lenders such as Life Insurance Corporation of India (LIC), Edelweiss ARC, ICICI Bank, and Union Bank, according to company filings. The move signals a robust financial recovery and enhances Reliance Infra's financial flexibility. Also, Reliance Infra board approved a preferential issue to raise Rs 3,014 crore, increasing the stake of Risee Infinity Pvt Ltd, a promoter group entity, along with other investors such as Florintree Innovation LLP and Fortune Financial &amp; Equities Services Pvt Ltd. The board also approved seeking shareholder authorization to raise an additional Rs 3,000 crore via a qualified institutional placement. This will provide further capital to strengthen the balance sheet and invest in new growth opportunities. With these fund infusions, Reliance Infra's net worth is set to rise from over Rs 9,000 crore to more than Rs 12,000 crore, according to the filings. The company is now well-positioned to invest in high-growth sectors, investors said.

Anil Ambani's Reliance Group starts transformation journey, achieves near zero-debt

<ul class="summary-list"><li>Starboard Value has taken a $1 billion stake in drugmaker Pfizer.</li><li>The hedge fund, headed by Jeff Smith, has become one of the most feared activist investors.</li></ul>Pharmaceuticals giant Pfizer got a wake up call Sunday evening when one of Wall Street's most feared activist investors revealed a stake in the company.Starboard Value <a target="_blank" class="" href="https://www.businessinsider.com/starboard-activist-significant-stake-in-drugmaker-pfizer-2024-10">informed the drugmaker</a> it had taken a position in the firm valued at $1 billion.An activist's aims, whether that's pushing for breakup, M&amp;A, or cost reductions, vary depending on the target. Starboard's turnaround strategy is not yet clear, but Pfizer's share price and revenues have tumbled from the record highs achieved during the pandemic's heights, and Starboard, led by its 52-year-old cofounder Jeff Smith, has a long history of wielding minority stakes to extract board seats and profits from name-brand companies.Over the past decade, Smith has more than doubled the hedge fund's assets under management to $8.5 billion by taking on targets including Salesforce, Starbucks, and the owner of Olive Garden. In that time Starboard has gained a reputation for making life uncomfortable for — and sometimes jettisoning — executives and directors who resist his overtures for change.Pfizer, with a market cap north of $160 billion, is among the largest companies Starboard's Smith has ever targeted. Still, investors seemed to applaud news of its investments on Monday, sending Pfizer's stock up about 3% in morning trading, adding nearly $5 billion to the company's market cap.Moreover, Starboard has reportedly secured support from <a target="_blank" href="https://www.wsj.com/health/pharma/activist-starboard-value-takes-1-billion-stake-in-pfizer-89591cb6?mod=hp_lead_pos4">former Pfizer executives</a> Ian Read and Frank D'Amelio for its campaign.Starboard has experience across the spectrum but is especially good at instilling discipline at the board level and "improving margins and cutting costs at companies that are bloated," said Ken Squire, the founder and president of 13D Monitor, a research firm specializing in shareholder activism.Starboard declined to comment.<h2 id="44e54273-f674-45fa-9c95-4d5153293525">Who is Jeff Smith?</h2>Investor activism has exploded in recent years. The 147 new campaigns globally in the first half of 2024 is a record, building on the all-time high 252 campaigns reached in 2023, according to a July report from investment bank Lazard.Starboard has become one of the most formidable names in the business, even if Smith hasn't yet reached the name recognition of activist investors like Paul Singer (Elliott Management), Carl Icahn (Icahn Enterprises), and Dan Loeb (Third Point Capital).Smith launched Starboard in 2011, spinning it out of a <a target="_blank" href="https://www.cowen.com/news/ramius-announces-spin-off-of-value-and-opportunity-business/">small unit at Cowen Group</a> along with a couple of partners, including Peter Feld. Early targets included AOL, where Starboard lost a proxy battle but agitated for changes that boosted the company's stock by 250%, and Office Depot, where Starboard won three board seats, according to <a target="_blank" href="https://fortune.com/2014/12/03/starboard-capitals-jeff-smith-activist-investor-darden-restaurants/">a 2014 story in Fortune</a>.Starboard put corporate America on notice with its campaign in 2013 against Darden Restaurants, the owner of Olive Garden and Longhorn Steakhouse, among other dining chains. With less than a 10% stake Smith replaced the entire 12-person board and assumed the role of chairman. By the time Smith stepped down in 2016, Darden <a target="_blank" href="https://www.wsj.com/articles/activists-reap-olive-garden-bounty-1459902161">stock had gained nearly 50%</a> and Starboard had accrued more than $500 million in profits.One of the hedge fund's greatest claims to fame involved its <a target="_blank" class="" href="https://www.wsj.com/articles/activists-reap-olive-garden-bounty-1459902161">improvements to Olive Garden's breadsticks</a>, which Starboard predicted could save the company up to $5 million a year, according to a Wall Street Journal report from 2015.In 2022, Starboard took a <a target="_blank" class="" href="https://www.businessinsider.com/salesforce-profit-margins-starboard-value-turnaround-2023-8">stake in software giant Salesforce</a>, urging the company to cut costs and improve margins. The company's shares have nearly doubled in the two years since.<div type="image" title="Photo of Marc Benioff of Salesforce speaking on stage." height="1333" width="2000" msid="114027436" hostid="261" sizebytes="41886"></div>Starboard's record isn't without blemishes. Its campaign against meat <a target="_blank" href="https://archive.nytimes.com/dealbook.nytimes.com/2015/02/04/a-primer-on-starboard-the-activist-that-pushed-for-a-staples-office-depot-merger/">processor Smithfield Foods</a> in 2013 fizzled. The hedge fund <a target="_blank" href="https://techcrunch.com/2021/09/09/box-wins-proxy-board-battle-with-activist-">lost a proxy battle</a> with software maker Box in 2021. And in 2019 it dropped a bid to have Bristol-Myers Squibb scrap its merger with Celgene after failing to win over <a target="_blank" class="" href="https://www.cnbc.com/2019/03/29/starboard-drops-out-of-celgene-fight-as-proxy-firms-back-bristol-myers-bid.html">two major proxy advisory firms</a>.In total, Starboard has initiated 151 activist campaigns, which have generated an average return of 25%, according to data from 13D Monitor.<h2 id="fc0d4b73-d1a3-4a74-a386-7908a74761a7">Ignore at your peril</h2>More recently, the hedge fund has taken positions in dating app owner Match Group, software company Autodesk, and Starbucks.Squire said Smith has a reputation as intense but intelligent and candid. Starboard "can be friendly, but if they're ignored they can also be feared — and they can get tough."In August, Starbucks replaced its CEO amid a campaign from Starboard and Elliott Management.Given Smith's record of winning corporate concessions — or prying them away by force — Pfizer CEO Albert Bourla may be next in the hot seat. Bourla took over in 2019 and guided the drugmaker through the pandemic, boosting annual revenues to $100 billion in 2022 thanks to sales of its COVID-19 vaccine and the antiviral treatment Paxlovid.But missteps ensued. Pfizer misjudged future demand for COVID remedies, <a target="_blank" href="https://www.wsj.com/health/pharma/pfizer-drug-company-cost-cutting-2da7524d?mod=article_inline">according to a WSJ report</a>, and revenues cratered. It has since undertaken multibillion-dollar cost cutting campaigns.For its next act, Pfizer executives wagered heavily on cancer treatments. It shelled out $43 billion last year to acquire Seagen, a Washington-based biotech company focused on developing novel cancer medicines. It expects Seagen's products to yield $3.1 billion in revenue this year and $10 billion in annual revenues by 2030.Still, its share price has fallen more than 50% since reaching an all-time high in December 2021.Starboard's targets cut across industries, including 23 campaigns in the healthcare sector, according to 13D Monitor. Besides Bristol-Myers Squibb, other prior targets include CVS and medical records and technology company Cerner.Pfizer did not respond to a request for comment. <h4 id="cbcdd8ad-013b-426e-8431-6c2b54c6859d">Greatest hits</h4><ul><li>2012: Starboard is credited with spurring AOL CEO Tim Armstrong to sell assets, including the sale of 800 patents to Microsoft for $1.1 billion.</li><li>2013: Starboard secured three seats on the board of Office Depot, which later agreed to merge with Staples before the Federal Trade Commission blocked the merger, citing antitrust reasons.</li><li>2014: Starboard replaced the entire board of Darden Restaurants, owner of Olive Garden. By 2015, Starboard was widely credited with turning Darden Restaurants around in part by rethinking how Olive Garden served its iconic breadsticks.</li><li>2019: Jeff Smith is named chairman of the board of pizza chain Papa John's. He immediately expanded the board by bringing in two new independent directors.</li><li>2022: Starboard urged software giant Salesforce to cut costs and improve its margins. The stock has nearly doubled since Starboard acquired a stake.</li><li>2024: After facing pressure from Elliott Management and Starboard, Starbucks replaced its CEO.</li></ul>

Meet Jeff Smith, the hedge-fund investor taking on Pfizer

<ul class="summary-list"><li>Peter Doyle's Kinetics Paradigm Fund rose over 20% in October and is up 97% year-to-date.</li><li>The fund has outperformed the S&amp;P 500, driven by Texas Pacific Land Corporation's 148% gain.</li></ul>Earlier this year, we started highlighting some of the <a target="_blank" class="" href="https://www.businessinsider.com/investors-of-the-month-top-fund-managers-stock-picks-august-2024-9">top-performing fund managers each month</a> as a way to highlight money managers delivering impressive returns who might be flying under the radar.Narrowing selections isn't the easiest task. Do you consider all funds, even those leveraged for outsized returns? What about funds listed outside the US, which most readers don't have access to anyway? What if a fund is up big in a particular month but performing just average over the last year and even worse over a longer time horizon?These questions resulted in selecting fund managers from a few different categories over the last couple of months, but going forward, we're to handle things a bit differently. For our investor of the month, we'll select a fund manager by considering a few different criteria: their fund is listed in the US; their fund outperformed peers in a given month; and their fund is outperforming a benchmark index (in most cases this will be the S&amp;P 500) on a trailing 12-month basis.Weighing these factors, choosing our investor of the month for October wasn't difficult.It's Peter Doyle, manager of the Kinetics Paradigm Fund (<a target="_blank" class="" href="https://markets.businessinsider.com/funds/kinetics-paradigm-fund-no-load-class-us4946136078">WWNPX</a>), which was up more than 20% in October and 97% year-to-date. Over the last 12 months, it has returned 78%, beating the S&amp;P 500's 35% gain. Over the longer term, the Paradigm fund's performance is even more impressive. Since December 1999, it's up 1,363% versus the S&amp;P 500's 304%.Rather surprisingly, Doyle has delivered these returns without the help of Nvidia or other Magnificent Seven stocks. The fund's top performer has been the Texas Pacific Land Corporation (<a target="_blank" class="" href="https://markets.businessinsider.com/stocks/tpl-stock">TPL</a>), a firm that makes money leasing the land it owns in the western part of Texas.Demand from AI firms looking to build out data centers on the land has pushed up shares of TPL a staggering 148% year-to-date."The amount of capital that's going to be spent to build out data centers and bringing AI and all of the things that are associated with that to fruition needs to be done where there's cheap energy, cheap electricity, and available real estate, and water," Doyle told Business Insider. "I think people are coming to the conclusion, although I think we're still early in the game, that a big chunk of that is going to take place in the western part of Texas."The stock is the Paradigm Fund's top holding and has soared to a 65% weighting in the fund amid its outperformance, even as Doyle has drastically taken profits and reduced his position by around half. When Doyle opened his position in the stock, its weight in the fund was 8%.Despite its massive weighting in the fund, Doyle seems extremely confident in the company and said its business model is highly predictable."They own very valuable real estate, and I know that that real estate is basically not going anywhere. And I know that people want to build AI data centers, and I know that that's the most logical place for that to happen in a very significant way," Doyle told Business Insider. "If 100% of my net worth were in TPL, I would be sleeping very well. That's how good I think it is."Other top holdings in the fund include the Grayscale Bitcoin Trust (<a target="_blank" class="" href="https://markets.businessinsider.com/stocks/gbtc-stock">GBTC</a>) at an 8.8% weighting, Brookfield (<a target="_blank" class="" href="https://markets.businessinsider.com/stocks/brppf-stock">BRPPF</a>) at 3.3%, and Landbridge (<a target="_blank" class="" href="https://markets.businessinsider.com/stocks/lb-stock">LB</a>) at 3.1%.

This fund manager up 97% this year thanks to an under-the-radar stock is BI's investor of the month for October

<ul class="summary-list"><li>OpenAI's $6.6 billion funding raise attracted some big names across the industry.</li><li>The investors had to fork over huge sums and reportedly avoid future investments in OpenAI's rivals.</li></ul>Sam Altman has taken his share of <a target="_blank" class="" href="https://www.businessinsider.com/sam-altman-openai-note-more-staff-exits-barret-bob-2024-9">bumps</a> <a target="_blank" class="" href="https://www.businessinsider.com/ilya-sutskever-leaving-openai-6-months-after-failed-altman-ouster-2024-5">and</a> <a target="_blank" class="" href="https://www.businessinsider.com/sam-altman-ousted-fired-openai-ceo-chatgpt-maker-2023-11">bruises</a> over the last year, but he proved yet again that he can convince investors to pour hundreds of millions into <a target="_blank" class="" href="https://www.businessinsider.com/openai-softbank-investment-ai-vision-2024-10">OpenAI.</a>The latest funding round appeared to be the hottest ticket in Silicon Valley, drawing a who's who of investors looking to get in on the buzzy AI startup's latest capital raise.The $6.6 billion round gave OpenAI a $157 billion post-money valuation and minted it into one of the most valuable startups in the world. The startup's valuation is now in the same neighborhood of publicly traded companies like Uber or AT&amp;T.In a statement posted to its website, OpenAI said the funding will "accelerate progress on our mission" and that it was "grateful to our investors for their trust in us."The investors' participation — which <a target="_blank" class="" href="https://www.ft.com/content/66e0653e-c446-47b2-8a7f-baa54ccbfb9a">reportedly carried the stipulation</a> that they shouldn't invest in rival AI companies — comes as OpenAI is discussing how to transform from a nonprofit organization into a more traditional <a target="_blank" class="" href="https://www.businessinsider.com/what-openai-needs-to-do-to-become-for-profit-altman-2024-9#">for-profit company</a> and <a target="_blank" class="" href="https://www.businessinsider.com/openai-leaders-who-left-since-2023-sam-altman-leadership-struggle-2024-9">several high-profile executives</a> have left to join rivals or start their own venture.Here's who broke out their checkbooks.<h2 id="c2afb3aa-677c-429d-a122-909331dfe44f">Thrive Capital</h2><div type="image" title="A photo of OpenAI CEO Sam Altman walking next to Anderson Cooper and Thrive Capital founder Josh Kushner at the Sun Valley conference." height="3881" width="5760" msid="113886506" hostid="261" sizebytes="589644"></div><a target="_blank" class="" href="https://www.businessinsider.com/joshua-kushners-thrive-capital-invests-in-studio-a24-2024-6">Thrive Capital</a> led the funding round, a spokesperson confirmed to Business Insider. The VC firm, founded by Josh Kushner, has made early investments in several now-prominent companies such as Slack and Instagram and previously invested in OpenAI.The venture firm invested about $1.25 billion, <a target="_blank" class="" href="https://www.wsj.com/tech/ai/openai-nearly-doubles-valuation-to-157-billion-in-funding-round-ee220607?mod=breakingnews">according</a> to a report from The Wall Street Journal. Thrive also has the option to invest another $1 billion in OpenAI next year at its current valuation if a revenue goal is reached, Reuters <a target="_blank" class="" href="https://www.reuters.com/technology/artificial-intelligence/openai-sees-116-billion-revenue-next-year-offers-thrive-chance-invest-again-2025-2024-09-28/">reported</a> last month.Besides being an investor in OpenAI, Kushner is close with Altman, The Information <a target="_blank" href="https://affiliate.insider.com?h=1cab063bf769ea9eb48814eb0a6d6dc829f20d25d9d18c766002829154b96aba&amp;postID=66fd750c0c43543ec7a4b399&amp;postSlug=openai-investors-latest-funding-round-2024-10&amp;site=bi&amp;u=https%3A%2F%2Fwww.theinformation.com%2Farticles%2Fwhy-josh-kushner-became-openais-fundraising-sherpa">reported</a> last month. "i have been fortunate to work with many great investors; there is no one i'd recommend more highly than josh," Altman wrote in <a target="_blank" class="" href="https://x.com/sama/status/1821340757225078966">a post on X</a>, formerly known as Twitter, in August.<h2 id="736a35a4-d4e2-49f2-9f06-528a5fbc3cd5">SoftBank</h2>The highly anticipated funding round also attracted newcomers like SoftBank. A source close to the Japanese media-technology conglomerate told Business Insider that it had invested $500 million.The deal gives the Tokyo-headquartered firm, led by enigmatic founder Masayoshi Son, its <a target="_blank" class="" href="https://www.businessinsider.com/openai-softbank-investment-ai-vision-2024-10">first major stake in a company developing the large language models (LLMs)</a> that have powered buzzy apps like ChatGPT in the generative AI boom.While SoftBank led several investments into AI-linked Silicon Valley firms before the generative AI boom through its $100 billion Saudi-backed Vision Fund, it has been slow to invest in a post-ChatGPT world as it has sought to repair its reputation following its disastrous WeWork bet.However, Son has signaled in recent months that he would be ready to make an investment splash again to capture the opportunities in the generative AI frenzy.At the company's annual meeting in June, the SoftBank founder told shareholders that past investments were just a "warm-up" for AI and advancing the technology is "what I was born to do."<h2 id="b79edc35-3e70-45b0-9358-2c370180b278">ARK Venture Fund</h2><div type="image" title="Cathie Wood" height="683" width="1024" msid="113886505" hostid="261" sizebytes="29948"></div><a target="_blank" class="" href="https://www.businessinsider.com/cathie-wood-ark-venture-openai-funding-2024-10">Cathie Wood's ARK Venture Fund agreed to invest</a> at least $250 million into this funding round, which is its second investment to the company, Business Insider first reported. Ark has also invested in several other big-name startups like Anthropic, xAI, SpaceX, FigureAI, and Databricks.Wood compared the state of artificial intelligence with that of the internet in the early 1990s in an <a target="_blank" href="https://affiliate.insider.com?h=a7010832e1d44d01ab25c98a17ab9f24fb271b74f6a8c21c378eb8a0ef13469b&amp;postID=66fd750c0c43543ec7a4b399&amp;postSlug=openai-investors-latest-funding-round-2024-10&amp;site=bi&amp;u=https%3A%2F%2Fwww.morningstar.com%2Ffunds%2Farks-cathie-wood-tesla-ai-bitcoin">April interview</a> with Morningstar."We had just begun, and we had miles to go," Wood said. "In fact, we're still learning how powerful the internet is. That is where we are with artificial intelligence today."ARK did not immediately respond to a request for comment from BI.<h2 id="5d016f09-af75-4bcf-beba-b9511454f495">Microsoft</h2>Microsoft invested a little under $1 billion into OpenAI's latest funding round, according to The Wall Street Journal report. The tech giant has a partnership with OpenAI and has already invested a reported <a target="_blank" class="" href="https://www.businessinsider.com/microsoft-satya-nadella-openai-partnership-competition-collaboration-2024-5">$13 billion into the company</a>. Rival <a target="_blank" class="" href="https://www.businessinsider.com/apple-microsoft-rivalry-deepens-with-openai-funding-round-talks-2024-8">Apple</a> reportedly mulled its own investment in OpenAI, though <a target="_blank" class="" href="https://www.businessinsider.com/apple-falls-out-talks-invest-openai-wsj-report-2024-9">nothing came of the talks</a>.Microsoft has also added OpenAI's technology to Bing, its search engine, and its Copilot AI tools, as well as some of its other products.Microsoft did not immediately respond to a request for comment from BI.<h2 id="4c5792d3-7b4d-4ead-9769-659377bc0dc4">Nvidia</h2><div type="image" title="Nvidia CEO Jensen Huang." height="3335" width="5000" msid="113886507" hostid="261" sizebytes="342642"></div>Nvidia is no stranger to the AI spotlight, with its chips the best-in-class option for companies like OpenAI that are building frontier AI models.Nvidia invested about $100 million in OpenAI's funding round, according to the Journal's report.Nvidia declined to comment, referring BI to OpenAI.<h2 id="e1270d87-4463-4ac3-8d68-0f45347c3b60">Tiger Global</h2><a target="_blank" class="" href="https://www.businessinsider.com/tiger-global-openai-latest-funding-round-2024-10">Tiger Global Management also invested</a> in OpenAI's latest funding round, Business Insider reported. The amount of the contribution couldn't be learned.The company aggressively invested in tech in recent years, making 335 investments in 2021, according to Crunchbase. The firm has since <a target="_blank" class="" href="https://www.businessinsider.com/crossover-funds-tiger-global-d1-deals-2024-2023-12">pulled back on its number of investments</a> per year as the market soured, but it purchased $125 million in OpenAI shares in 2021.<h2 id="e98b1792-d5c0-48d7-b6d8-2766c05647d5">Fidelity</h2>Fidelity also participated in OpenAI's latest funding round. The asset manager recently participated in a funding round for Elon Musk's xAI.Fidelity often invests in late-stage startups that could go public in IPOs a few years later. The strategy can help big mutual fund firms get in ahead of potentially hot IPOs at a lower price.<h2 id="6d05f1b3-01e2-4e70-b574-f8fe21b1f9c6">Altimeter Capital Management</h2>Altimeter Capital Management also contributed to OpenAI's latest funding round, according to reports. Altimeter did not immediately respond to a request for comment from BI.Brad Gerstner, CEO and founder of the investment firm, said at an AI conference on Wednesday after the founding round announcement that OpenAI's next move should be an IPO."Having the opportunity for every retail investor in America to share in the upside that gets created by AI at a time we're going to have massive social disruption, jobs lost, and other things, I think it's critically important," Gerstner said, <a target="_blank" class="" href="https://www.geekwire.com/2024/openai-investor-says-the-next-step-for-the-chatgpt-maker-should-be-to-go-public/">according</a> to GeekWire.<h2 id="59757869-f9b3-4325-827e-57256dbfbbd3">Khosla Ventures</h2><div type="image" title="Portrait of Vinod Khosla with purple/blue lighting" height="5354" width="8028" msid="113886504" hostid="261" sizebytes="613812"></div>Khosla Ventures also participated in the funding round.Vinod Khosla, who cofounded Sun Microsystems, recently wrote in a lengthy <a target="_blank" rel=" nofollow" href="https://www.khoslaventures.com/ai-dystopia-or-utopia/?campaign_id=4&amp;emc=edit_dk_20240923&amp;instance_id=135030&amp;nl=dealbook&amp;regi_id=71823306&amp;segment_id=178573&amp;te=1&amp;user_id=f058385abc0a81f5ba25805ecd26bcd9#02-c">post</a> on his VC firm website that AI would reduce costs and take over most of the work humans do — and do it better, for the most part. He also predicted there would be one billion robots in the next 25 years.Khosla previously invested in OpenAI.<h2 id="9217eb9c-0bd6-4a0e-a57f-18b634e4595e">MGX</h2>MGX, an investment firm backed by the United Arab Emirates, participated in OpenAI's latest round, Reuters <a target="_blank" class="" href="https://www.reuters.com/technology/artificial-intelligence/openai-closes-66-billion-funding-haul-valuation-157-billion-with-investment-2024-10-02/">reported</a>. The firm did not immediately respond to a request for comment outside business hours.The firm was set up earlier this year to invest in artificial intelligence and semiconductors, Bloomberg <a target="_blank" class="" href="https://www.bloomberg.com/news/articles/2024-03-11/abu-dhabi-said-to-target-100-billion-aum-for-ai-investment-firm">reported</a> in March. At the time, MGX was reportedly aiming to have $100 billion under management in the coming years.

The investors behind OpenAI's historic $6.6 billion funding round

<ul class="summary-list"><li>This is an excerpt from the Insider Today newsletter.</li></ul>OpenAI is viewed as one of the most important startups in Silicon Valley. It now has a price tag to match.The high-profile startup announced the closing of a $6.6 billion funding round that valued it at $157 billion. It marks the largest VC round of all time and makes OpenAI one of the most valuable startups in the world, alongside Elon Musk's SpaceX and ByteDance, TikTok's parent company.So, who invested?Josh Kushner's Thrive Capital is leading the round. Repeat investors include Cathy Wood's Ark Venture Fund, Chase Coleman's Tiger Global, and OG OpenAI backer Microsoft. New faces include chip giant Nvidia and Masayoshi Son's SoftBank. Here's a <a target="_blank" href="https://www.businessinsider.com/openai-investors-latest-funding-round-2024-10">complete rundown of the backers</a>.The big news comes amid wider turmoil at the startup. Last week, Chief Technology Officer Mira Murati became the latest executive to depart the firm. That was coupled with news of OpenAI's plans to become a for-profit corporation.(OpenAI exec Kevin Weil told Business Insider's Rob Price the startup <a target="_blank" href="https://www.businessinsider.com/openai-kevin-weil-mira-murati-great-bench-cto-abrupt-departure-2024-10">still has a "great bench</a>," so there's that.)In the meantime, OpenAI's rivals like Anthropic and Perplexity <a target="_blank" href="https://www.businessinsider.com/openai-rivals-anthropic-perplexity-on-prowl-after-wave-exec-departures-2024-10">are pitching themselves as being about mission over profits</a>. And more exits could be coming since OpenAI is reportedly working on allowing its employees <a target="_blank" href="https://www.businessinsider.com/openai-chatgpt-stock-sale-artificial-intelligence-fundraising-valuation-sam-altman-2024-10">to sell their shares in the company</a>.<div type="image" title="Photo illustration of Sam Altman" height="2250" width="3000" msid="113912126" hostid="261" sizebytes="213128"></div>It's important to remember OpenAI's eye-popping valuation is just that … a valuation.Silicon Valley has a long list of high-flying startups that raised money on massive valuations that have proved difficult to maintain.Take the fintech Stripe, which was valued at almost $100 billion at its height in 2021 only to see its valuation get cut down amid a downturn in the industry. Even as it claws its way back, one of its backers has reportedly offered to buy its own investors' shares in the startup <a target="_blank" href="https://www.axios.com/2024/07/15/sequoia-capital-stripe">who want liquidity</a>.Which gets us back to $157 billion OpenAI. At that size, and with the current regulatory environment around AI and Big Tech, an acquisition is almost certainly out of the question. That leaves the public markets, another daunting task.If OpenAI were to IPO tomorrow at that value, it would be the second-largest American IPO by initial valuation, trailing only Alibaba, which went public in September 2014 at a $169.4 billion price tag."I hope and expect that the next step for OpenAI would be to go public," Altimeter Capital's Brad Gerstner, who is an OpenAI investor, <a target="_blank" href="https://www.geekwire.com/2024/openai-investor-says-the-next-step-for-the-chatgpt-maker-should-be-to-go-public/">said at a conference Wednesday</a>.But even if the IPO market can shake its current drought, questions remain if <a target="_blank" href="https://www.businessinsider.com/ai-impact-overblown-investment-tech-stocks-billions-daron-acemoglu-mit-2024-10">AI is just a bubble waiting to pop</a>. At the very least, turning a profit from the tech, which is costly to build and maintain, is proving difficult for just about everyone. OpenAI will reportedly lose as much <a target="_blank" href="https://www.businessinsider.com/openai-implosion-investors-vcs-2024-9">as $5 billion this year</a>.On the other hand, if OpenAI can maintain its position as the go-to AI app, and the wider industry is as transformational as some believe it is, getting in at a $157 billion valuation might be a bargain.The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York. Hallam Bullock, senior editor, in London. Jordan Parker Erb, editor, in New York. Milan Sehmbi, fellow, in London. Amanda Yen, fellow, in New York.

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