OpenAI, the creator of ChatGPT, has just concluded its latest round of funding, raising around $6.6 billion. This propelled its valuation to a whopping $157 billion, making it one of the most successful startups in history. This funding and the company’s valuation are testaments to immense investor confidence in the company’s potential within the rapidly growing artificial intelligence market.
The latest round of funding saw participation from old and new investors. Thrive Capital, Khosla Ventures, and Microsoft were the returning investors, while Nvidia added itself to the list of OpenAI investors. There were talks about Apple’s participation in the funding round, but Apple did not show up despite reports.
Thrive Capital, one of OpenAI’s most trusted investors, committed approximately $1.2 billion. Moreover, their close proximity to the company opened up new opportunities for the investment firm, as OpenAI and Thrive Capital made another deal, according to which Thrive Capital can invest another $1 billion on the same valuation if OpenAI reaches certain revenue targets.
Although OpenAI is a non-profit organization, its leaders, like Sam Altman, now aim to transition to a for-profit model to drive returns for its investors. This has even created some internal ruckus as only last week, the CTO of the company, Mira Murati, left the company due to some complications with the growth plan of OpenAI.
OpenAI forecasts a significant revenue boost to $11.6 billion next year, a sharp rise from the projected $3.6 billion this year, even though it expects to incur losses exceeding $5 billion in 2024. Investors have secured protective measures during the restructuring phase, allowing them to withdraw their funds or renegotiate the company’s valuation if the planned changes are not executed within two years.
