At a value of $157 billion, OpenAI has concluded its eagerly awaited fundraising round, which includes the $6.6 billion the business collected from several investment firms and major tech corporations.
Although the investors were not identified in the news statement issued by OpenAI on Wednesday, a source with knowledge of the situation stated that Thrive Capital led the round, which also included involvement from Microsoft, a current supporter, Nvidia, SoftBank, and other companies. Thrive has previously told CNBC that it intended to contribute $1 billion to the round.
Over the past few years, the biggest story in the tech industry has been OpenAI’s rapid ascent, which started with the launch of ChatGPT in late 2022.
OpenAI has been instrumental in popularizing the idea of generative artificial intelligence and in opening the door for tens of billions of dollars to be invested in AI infrastructure.
In a blog post published on Wednesday, OpenAI stated, “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.”
According to The New York Times, OpenAI brought in $300 million in income last month—a 1,700% increase from the start of the year—as corroborated by CNBC last week. The business anticipates $11.6 billion in sales in 2024, up from $3.7 billion in 2024, according to an OpenAI insider who wished to remain anonymous due to the confidentiality of the company’s finances.
But all that income is highly costly, as OpenAI has to crank up purchases of Nvidia’s graphics processing units (GPUs) to train and run its massive language models. According to the individual, the corporation anticipates losing around $5 billion this year. Microsoft is a major partner of OpenAI, having invested billions of dollars in the software giant as it grows its Azure cloud business.
Earlier this year, OpenAI was valued at an estimated $80 billion, up from $29 billion in 2023. With the introduction of additional commercial solutions and an expansion into AI-generated images and videos, ChatGPT’s viral growth has persisted.
OpenAI’s CFO Sarah Friar told CNBC in a statement that the company currently has 250 million active weekly users on ChatGPT. According to a person close to the company, there are also one million paying business customers on ChatGPT and eleven million ChatGPT Plus members.
According to Friar’s statement, “AI is already personalizing learning, accelerating healthcare breakthroughs, and driving productivity.” “And this is only the beginning.”
Among the many growing pains OpenAI is going through is the departure of important executives, a trend that persisted into last week.
Mira Murati, the chief technology officer of OpenAI and a temporary acting CEO, announced her departure last Wednesday, citing her six and a half-year tenure. Bob McGrew, the head of research, and vice president Barret Zoph announced their resignations from the business shortly afterward.
“I think this will be hopefully a great transition for everyone involved and I hope OpenAI will be stronger for it, as we are for all of our transitions,” stated OpenAI CEO Sam Altman in an interview conducted the following day at Italian Tech Week.
According to a different individual with knowledge of the subject, OpenAI conducted an all-hands meeting on Thursday as well, after the board decided to explore reorganizing the firm into a for-profit enterprise. Contrary to several media accounts, Altman stated that the departures had nothing to do with the proposed restructure.
As to the source, in the event of the transition, the nonprofit sector would continue to exist as an independent institution.
According to someone who attended the meeting on Thursday, Altman refuted rumors that he would be receiving a “huge equity stake” in the business, describing the information as “just not true.”
In a statement to CNBC last week, OpenAI Chairman Bret Taylor stated that although the board has discussed the issue, no concrete numbers have been discussed.
“The board has discussed whether Sam receiving equity compensation would be beneficial to the company and our mission, but no decisions have been made or specific figures discussed,” Taylor added.
According to individuals who spoke with CNBC, Khosla Ventures, Altimeter Capital, Fidelity, MGX, and Tiger Global were also involved in the most recent fundraising round.
