In the largest venture capital deal of all time, ChatGPT maker OpenAI has completed the much-anticipated funding round raising $6.6 billion at a post-money valuation of $157 billion, a huge leap from its last round at $80 billion.
The funding round was led by New York-based VC firm Thrive Capital, and a host of other existing and new investors including SoftBank, Nvidia, its biggest backer Microsoft, Khosla Ventures, Altimeter Capital, Fidelity, Tiger Global and MGX.
Record funding at sky-high valuation is being attributed to Sam Altman-led OpenAI's planned transformation from a non-profit entity to a for-profit company.
"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," the San Francisco-based company says.
Thrive Capital has reportedly committed around $1.2 billion via its fund and an SPV (special purpose vehicle).
Apple, which in June 2024 announced a partnership to integrate ChatGPT into iOS, iPadOS, and macOS, was reportedly in talks to invest in the company, though its name was not among the final list of investors in the latest round.
OpenAI's proposed for-profit structure plan will see a new independent for-profit board. Under the new arrangement, investors pumping money into OpenAI could also see no cap on returns.
Amid several questions over the company's intended shift and a series of top-level exits, the investors are undeterred because of OpenAI's sound revenue projections. This year, OpenAI is estimated to collect revenue worth $3.6 billion with losses worth $5 billion. But next year, the revenue is expected to rise three-fold.
Founded in 2015, OpenAI has around 250 million weekly active users. "Every week, over 250 million people 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," says the company.
With fresh cash, the company aims to expand computing power to push the boundaries of AI. It aims to make "advanced intelligence" a widely accessible resource. "...we look forward to working with our partners, developers, and the broader community to shape an AI-powered ecosystem and future that benefits everyone."
However, questions are being raised over the speed at which the company intends to grow and safety around artificial general intelligence issues.
Last week, its top technology executive Mira Murati resigned along with two other executives. Though they didn't speak against the company, many reports point towards misalignment between product and safety teams. "I am stepping away as I want to create the time and space to do my exploration," said Murati. Soon, OpenAI chief research officer Bob McGrew and research vice president Barret Zoph said they were also parting ways with the company.
Besides Murati, famed researcher Ilya Sutskever, who co-founded OpenAI, also resigned from the company in June 2024 to pursue his project. OpenAI Co-founder Brockman, meanwhile, is also on a "sabbatical". Another co-founder John Schulman resigned in August and later joined Anthropic.
