OpenAI, an AI giant has announced that raised $6.6 billion in new funding at a post-money valuation of $157 billion. The new funding will be used to double down on our leadership in frontier AI research, increase compute capacity, and continue building tools that help people solve hard problems.
The deal is one of the largest-ever private investments, and makes OpenAI one of the three largest venture-backed startups, alongside Elon Musk’s SpaceX and TikTok owner ByteDance Ltd.
The funding round was led by the venture capital firm, Thrive Capital with $1.25 billion. Thrive Capitals also plans to invest $1 billion next year if the company hits the revenue target. Thrive Capital is managed by Josh Kushner, former President Donald Trump’s son-in-law and former senior adviser.
OpenAI’s new investors include chipmaker Nvidia; MGX, a new technology investment company from the United Arab Emirates; and SoftBank, the Japanese firm.
Other investors included SoftBank, Fidelity Management, Altimeter Capital, MGX, Abu Dhabi’s state-backed investment firm and OpenAI’s previous largest investor Microsoft, which contributed a little less than $1 billion. Microsoft, an early investor that has since sunk at least $13 billion into OpenAI since 2019.
The funding has attracted returning venture capital investors including Thrive Capital and Khosla Ventures, as well as OpenAI’s biggest corporate backer Microsoft, and new participation from Nvidia.
Existing investors also participated, including Microsoft, Khosla Ventures and New York investment firm Tiger Global Management.
Apple was also in talks to invest in OpenAI but did not end up joining the funding.
The company’s valuation has also risen from $14 billion in 2021 to $157 billion and its revenue grew from zero to $3.6 billion. The company expects to bring in $11.6 billion in sales next year.
OpenAI’s new valuation is nearly double its approximately $80 billion valuation in February following a deal that allowed employees to sell shares in the company.
OpenAI has also more than quadrupled its value since last year, when its valuation reached $29 billion and has increased its workforce from 1,000 to 1,700.
“We’ve raised $6.6B in new funding at a $157B post-money valuation to accelerate progress on our mission. The new funding will allow us to double down on our leadership in frontier AI research, increase compute capacity, and continue building tools that help people solve hard problems,” OpenAI said in a statement.
We aim to make advanced intelligence a widely accessible resource. We’re grateful to our investors for their trust in us, and we look forward to working with our partners, developers, and the broader community to shape an AI-powered ecosystem and future that benefits everyone. By collaborating with key partners, including the U.S. and allied governments, we can unlock this technology’s full potential,” the statement further added.
The company also revealed that it has some 250 million weekly ChatGPT users.
“We are making progress on our mission to ensure that artificial general intelligence benefits all of humanity. Every week, over 250 million people around the world use ChatGPT to enhance their work, creativity, and learning. Across industries, businesses are improving productivity and operations, and developers are leveraging our platform to create a new generation of applications. And we’re only getting started,” the statement said.
The closing of the funds also coincides with the company’s ongoing restructuring efforts and executive changes, including the abrupt departure of its longtime Chief Technology Officer, Mira Murati, last week.
Last November, the company’s board fired and then quickly rehired its Chief Executive Officer Sam Altman. In the following months, the company has remade its board, hired hundreds of new employees and lost several key leaders, including Sutskeve.
OpenAI is also in the process of transitioning to a for-profit company, abandoning its nonprofit roots. As part of the transition, the company has been looking for ways to better monetize its tech.
OpenAI CEO Sam Altman, who will reportedly receive a 7% stake in the company once it converts to a for-profit structure, will potentially see his stake increase to 11% with the new valuation.
