OpenAI raises $157 billion valuation; Microsoft, Nvidia participate in the negotiation round
OpenAI has closed its long-awaited funding round at a valuation of $157 billion, including $6.6 billion the company raised from an extensive list of investment firms and major technology companies.
While OpenAI did not name investors in Wednesday’s press release, a person familiar with the matter said the round was led by Thrive Capital and included participation from existing backers. Microsoft as well as chip manufacturers Nvidia, SoftBank and others. Thrive has planned to invest 1 billion USD this round, CNBC previously reported.
The rapid growth of OpenAI, which began with the launch of ChatGPT in late 2022, has become the biggest story in the tech industry over the past few years, bringing the concept of generative artificial intelligence into the mainstream. mainstream and pave the way for tens of billions of dollars of investment in AI infrastructure.
“The new funding will enable us to double our leadership in pioneering AI research, increase our computing power, and continue to build innovative technologies,” OpenAI wrote in a blog post Wednesday. tools to help people solve difficult problems.”
OpenAI generated $300 million in revenue last month, up 1,700% since the beginning of last year, CNBC confirm last week, as reported by The New York Times. According to a person close to OpenAI, who requested anonymity because financial information is confidential, the company is expected to bring in $11.6 billion in revenue next year, up from 3,000 billion. 7 billion USD by 2024.
But all that revenue is extremely expensive, as OpenAI has to increase its purchases of Nvidia 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 strengthens its Azure cloud business.
Earlier this year, OpenAI was valued at $80 billion, up from $29 billion in 2023. Following the viral growth of ChatGPT, momentum continues with new enterprise products and expansion into AI-generated photos and videos.
OpenAI now has 250 million weekly active users on ChatGPT, CFO Sarah Friar told CNBC in a statement. There are also 11 million ChatGPT Plus subscribers and 1 million paying business users on ChatGPT, a person close to the company said.
“AI is already personalizing learning, accelerating healthcare breakthroughs, and boosting productivity,” Friar said in the statement. “And this is just the beginning.”
OpenAI is experiencing growing pains, including the loss of key executives, a trend that continues all last week.
Last Wednesday, OpenAI Chief Technology Officer Mira Murati, who briefly served as interim CEO, said she was leaving after six and a half years. Soon after, chief research officer Bob McGrew and Barret Zoph, vice president of research, said they were leaving the company.
In an interview the next day at Italian Technology Week, OpenAI CEO Sam Altman said: “I think this will hopefully be a great transformation for everyone involved and I Hopefully OpenAI will be stronger for it, as we are for all of our transitions.”
Also on Thursday, OpenAI held an all-hands meeting, following the board’s decision to consider restructuring the company into a business for profitaccording to a separate person with knowledge of the matter. Altman said the departure was not related to a potential restructuring, contrary to some media reports.
If the change happens, the nonprofit segment would remain a separate entity, the source said.
At Thursday’s meeting, Altman denied reports of the plan for him to receive “huge shares” in the company, calling the information “untrue”, according to a person present.
OpenAI President Bret Taylor told CNBC in a statement last week that although the board discussed the issue, no specific numbers were given.
“The board discussed whether it would be beneficial for the company to require Sam to be compensated in equity, but no specific numbers were discussed,” Taylor said. No decisions have been made.”
Sources told CNBC that the latest funding round also included participation from Khosla Ventures, Altimeter Capital, Fidelity, MGX and Tiger Global.
