OpenAI closed its long-awaited funding round at a $157 billion valuation, including $6.6 billion the company raised from an extensive list of investment firms and major tech companies.
While OpenAI did not name the investors in Wednesday’s press release, a person with knowledge of the matter said the round was led by Thrive Capital and included participation from existing backers Microsoft as well as a chip maker NvidiaSoftBank and others. Thrive planned to invest $1 billion in the round, CNBC previously reported.
The rapid rise of OpenAI, which began with the launch of ChatGPT in late 2022, has been the biggest story in the tech industry over the past two years, bringing the idea of genetic artificial intelligence into the mainstream and paving the way for tens of billions of dollars of investment in artificial intelligence infrastructures.
“The new funding will allow us to double down on our leadership in cutting-edge AI research, increase computing power and continue to build tools that help people solve hard problems,” OpenAI wrote in a blog post on Wednesday.
“We look forward to continuing our partnership with OpenAI,” a Microsoft spokesperson told CNBC in a statement.
OpenAI brought in $300 million in revenue last month, up 1,700% since the start of last year, CNBC confirmed last week, following a New York Times report. The company expects to generate $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 identified because the financials are confidential.
But all this revenue is extremely expensive, as OpenAI must increase 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 ramps up its Azure cloud operations.
Earlier this year, OpenAI was valued at $80 billion, up from $29 billion in 2023. After the viral growth of ChatGPT, the momentum continued with new products for businesses and an 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.
“Artificial intelligence is already personalizing learning, accelerating healthcare innovation and increasing productivity,” Friar said in the statement. “And this is just the beginning.”
OpenAI is experiencing a lot of growing pains along the way, including the loss of key executives, a trend that continued last week.
Last Wednesday, OpenAI Chief Technology Officer Mira Murati, who briefly served as interim CEO, said she would be stepping down after 6½ years. Shortly after that, 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 Tech Week, OpenAI CEO Sam Altman said: “I think it will be a great transition for everyone involved, and I hope that OpenAI will be stronger for it, as we are for all our transitions.”
Also on Thursday, OpenAI held a general meeting, after the board decided to consider restructuring the company into a for-profit business, according to a separate person with knowledge of the matter. Altman said the departures were not related to the potential restructuring, contrary to some media reports.
If the change happens, the nonprofit sector will remain as a separate entity, the source said.
At Thursday’s meeting, Altman denied reports of plans to take a “giant equity stake” in the company, calling that information “simply not true,” according to a person present.
OpenAI president Bret Taylor told CNBC in a statement last week that while the board has talked about the issue, there are no specifics on the table.
“The board has had discussions about whether it would be beneficial to the company and our mission to compensate Sam with equity, but no specifics have been discussed or decisions made,” Taylor said.
The latest round of funding also included participation from Khosla Ventures, Altimeter Capital, Fidelity, MGX and Tiger Global, sources told CNBC.
