OpenAI has taken in a historic $6.6 billion investment as a result of its latest venture capital funding round, which led the company behind ChatGPT to obtain a $157 billion valuation.
The company plans to use the funding to “double down on our leadership in frontier AI research, increase compute capacity and continue building tools that help people solve hard problems”, it said in a statement.
OpenAI didn’t name the investors that took place in the round. According to the Financial Times, the round was led by Thrive Capital, which committed $1 billion. The company was also said to have received a special deal that would allow it to invest another $1 billion next year at the same valuation, subject to OpenAI hitting an undisclosed revenue goal, Reuters reported.
The round was also said to have included participation from existing backer Microsoft, new investments from firms such as Nvidia, and VC investors including Khosla Ventures and Abu Dhabi’s state-backed fund MGX. Altimeter Capital, Fidelity and SoftBank were also named as investors.
“We look forward to continuing our partnership with OpenAI,” a Microsoft spokesperson told CNBC in a statement.
These funds are said to be contingent on OpenAI going through with a restructure as a for-profit company, with investors being able to ask for their money back should the restructe process not be completed within the next two years, Axios reported.
Currently, OpenAI’s for-profit wing is overseen by a nonprofit research body, and investor profits are capped at 100x.
In September, OpenAI generated $300 million in revenue last month, up 1,700% since the beginning of last year, CNBC confirmed last week, following reporting 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.
In a conversation with Finance Middle East, Zack Kass, an AI futurist and Former Head of GTM at OpenAI, stressed why the integration of AI with quantum computing and the emphasis on ethical AI governance are set to dominate the narrative in the coming years. OpenAI’s new valuation is only the latest example.
