OpenAI has closed its long-awaited funding round at a $157 billion valuation, which includes $6.6 billion the company has raised from an extensive list of investment firms and large tech companies.
While OpenAI did not name the investors in Wednesday’s press release, a person familiar with the matter said the round was led by Thrive Capital and included participation from an existing backer. Microsoft as well as the chipmaker NvidiaSoftBank and others. Thrive plans to invest $1 billion in the round, CNBC previously reported.
The rapid rise of OpenAI, which began with the introduction of ChatGPT in late 2022, has been the biggest story in the tech industry over the past two years, bringing the concept of artificial intelligence creation into the mainstream and paving the way for tens of billions of dollars. Investments in AI infrastructure.
“The new funding will allow us to double down on our leadership in frontier AI research, increase computational capacity, and continue building tools that help people solve hard problems,” OpenAI wrote in a blog post Wednesday.
OpenAI generated $300 million in revenue last month, a 1,700% increase from the start of last year, CNBC confirmed last week, following a report by The New York Times. The company expects to bring in $11.6 billion in sales next year, up from $3.7 billion in 2024, according to a person close to OpenAI, who asked not to be named because the finances are confidential.
But all that revenue comes at a price, as OpenAI must leverage Nvidia’s graphics processing units (GPUs) to train and run its large language models. The company expects to lose about $5 billion this year, the person said. Microsoft has invested billions of dollars in OpenAI and is a key partner as the software giant develops its Azure cloud business.
Earlier this year, OpenAI was valued at $80 billion by 2023, up from $29 billion. Following ChatGPT’s viral growth, momentum continued with new products for businesses and expansion into AI-generated photos and videos.
OpenAI now has 250 million weekly active users on ChatGPT, CFO Sarah Frier told CNBC in a statement. ChatGPT has 11 million ChatGPT Plus subscribers and 1 million paying business users, according to a person close to the company.
“AI is already personalizing learning, accelerating healthcare advances and driving productivity,” Friar said in the report. “This is just the beginning.”
OpenAI is experiencing a number of growing pains, including the loss of key executives, a trend that has continued over the past week.
Last Wednesday, OpenAI Chief Technology Officer Meera Murati, who served briefly as interim CEO, said she was leaving after 6½ years. Shortly thereafter, research president Bob McGrew and research vice president Barrett Zoff said they were leaving the company.
The following day at Italian Tech Week, OpenAI CEO Sam Altman said in an interview, “I think this will be a great change for everyone involved, and I hope OpenAI will be as strong for it as we are for all our changes.”
On Thursday, OpenAI held an all-board meeting, according to a separate person familiar with the matter, following the board’s decision to restructure the company as a for-profit business. Contrary to some media reports, Altman said the departures are not related to potential restructuring.
In case of a change, the nonprofit division will be a separate entity, the source said.
At Thursday’s meeting, Altman denied plans to acquire a “huge equity stake” in the company, calling the information “not true.”
OpenAI President Brett Taylor said in a statement to CNBC last week that while the board had discussed the matter, no specific figures were on the table.
“The board has discussed whether compensating Sam through equity would benefit the company and our work, but no specific figures have been discussed or a decision made,” Taylor said.
The latest funding round also included participation from Khosla Ventures, Altimeter Capital, Fidelity, MGX and Tiger Global, sources told CNBC.
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