ChatGPT developer OpenAI has secured $6.6bn from investors in a new funding round, potentially valuing the US artificial intelligence (AI) company at $157bn. The funding attracted participation from returning venture capital investors, including Thrive Capital and Khosla Ventures along with OpenAI’s primary corporate backer, Microsoft. US GPU firm Nvidia joined as a new investor.
UAE’s state-backed investment firm MGX, American technology-focused investment firm Altimeter Capital, Fidelity, and SoftBank were also involved in the financing round.
OpenAI aims to utilise the new capital to strengthen its leadership in frontier AI research, enhance compute capacity, as well as continue developing tools to help people solve difficult problems.
“We aim to make advanced intelligence a widely accessible resource,” said a company spokesperson. “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.
Managerial shake-up at OpenAI
The closing of the new funding round coincides with the company’s ongoing restructuring efforts and recent executive changes, including the sudden exit of its chief technology officer Mira Murati last week. Recently, reports surfaced that OpenAI is working on restructuring its core business into a for-profit benefit company that will no longer be controlled by its non-profit board. The OpenAI non-profit is expected to continue to exist and own a minority stake in the for-profit company.
Earlier this week, OpenAI chief financial officer Sarah Friar was reported to have informed employees that the company would be able to offer liquidity through a tender offer to repurchase their shares following the funding. However, specific details and timing are yet to be determined.
Earlier this year, the ChatGPT developer let some of its employees to cash out their shares of the company at a valuation of $86bn.
By combining funds from its own portfolio and a special purpose vehicle for smaller investors, Thrive Capital committed approximately $1.2bn. It also negotiated the option to invest an additional $1bn next year at the same valuation if OpenAI meets a revenue target, reported Reuters, citing undisclosed sources.
It is also reported that Apple, which had been in talks to invest in OpenAI, ultimately did not join the funding.
Profit expectations for AI’s wunderkind
In addition, the sources said that the AI company is on track to generate $3.6bn in revenue this year while facing losses exceeding $5bn. It also projects a surge in revenue next year to $11.6bn.
Last month, OpenAI announced surpassing the milestone of one million paid business users for its enterprise services, including ChatGPT Enterprise, ChatGPT Team, and ChatGPT Edu. Since the launch of ChatGPT Team in January 2024, OpenAI’s business customer base has increased from 600,000 in April to hit the one-million mark last month. This represents a 67% growth in nearly five months.
OpenAI also introduced OpenAI o1, which is claimed to be the first AI model in the new series equipped with ‘reasoning’ capabilities. Nicknamed the ‘Strawberry’ model, its creators claim that the new platform is capable of handling more complex queries.
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