OpenAI Secures $6.6 Billion in Funding
OpenAI has successfully raised $6.6 billion in funding.
TroibNews 
OpenAI, the organization behind ChatGPT, has successfully secured $6.6 billion in funding from investors, potentially valuing the company at $157 billion and solidifying its status as one of the most valuable private firms globally.
This funding round saw the participation of returning venture capital investors like Thrive Capital and Khosla Ventures, along with OpenAI's major corporate supporter Microsoft and new involvement from Nvidia.
The closure of the funding coincides with the company's ongoing restructuring and executive transitions, including the unexpected departure of longtime chief technology officer Mira Murati last week.
Other participants in this funding round included Altimeter Capital, Fidelity, SoftBank, and Abu Dhabi's state-backed investment firm MGX.
On Wednesday, OpenAI Chief Financial Officer Sarah Friar informed employees that the firm would be able to offer liquidity through a tender offer to repurchase their shares following this funding, although specifics regarding timing and details are yet to be determined by sources. Earlier this year, some employees had the opportunity to cash out shares at a valuation of $86 billion.
Thrive Capital, which contributed around $1.2 billion from its own fund and a special purpose vehicle for smaller investors, negotiated the option to invest an additional $1 billion next year under the same valuation, contingent on the AI firm meeting a revenue target, sources revealed.
Although Apple was in discussions to invest in OpenAI, it ultimately decided not to participate in the funding, according to anonymous sources. Apple has not provided a comment on the matter.
The funds were raised in the form of convertible notes, with the conversion to equity dependent on a successful transition to a for-profit model that would eliminate control by the non-profit board and remove caps on investor returns.
Despite recent personnel changes, investor enthusiasm remains high, with many anticipating substantial growth based on projections from OpenAI CEO Sam Altman.
The company is on track to generate $3.6 billion in revenue this year despite incurring losses exceeding $5 billion. It forecasts a significant revenue increase to $11.6 billion next year, according to informed sources.
Investors have also established protections during OpenAI’s complex corporate restructuring, which would enable Altman to receive equity. Discussions regarding these terms are ongoing, with no set timeline for completion.
Some terms negotiated by investors allow them to reclaim their capital or renegotiate the valuation if the proposed changes are not executed within the next two years, sources indicated.
OpenAI's rapid ascent in product popularity and valuation has drawn global attention. Since the introduction of ChatGPT, it has gained 250 million weekly active users. The company's valuation has soared from $14 billion in 2021 to $157 billion, experiencing revenue growth from zero to $3.6 billion—far surpassing Altman's initial projections.
OpenAI has informed investors of its continued pursuit of artificial general intelligence, aiming to develop AI systems that exceed human intelligence while also focusing on commercialization and profitability.
Alejandro Jose Martinez contributed to this report for TROIB News
This funding round saw the participation of returning venture capital investors like Thrive Capital and Khosla Ventures, along with OpenAI's major corporate supporter Microsoft and new involvement from Nvidia.
The closure of the funding coincides with the company's ongoing restructuring and executive transitions, including the unexpected departure of longtime chief technology officer Mira Murati last week.
Other participants in this funding round included Altimeter Capital, Fidelity, SoftBank, and Abu Dhabi's state-backed investment firm MGX.
On Wednesday, OpenAI Chief Financial Officer Sarah Friar informed employees that the firm would be able to offer liquidity through a tender offer to repurchase their shares following this funding, although specifics regarding timing and details are yet to be determined by sources. Earlier this year, some employees had the opportunity to cash out shares at a valuation of $86 billion.
Thrive Capital, which contributed around $1.2 billion from its own fund and a special purpose vehicle for smaller investors, negotiated the option to invest an additional $1 billion next year under the same valuation, contingent on the AI firm meeting a revenue target, sources revealed.
Although Apple was in discussions to invest in OpenAI, it ultimately decided not to participate in the funding, according to anonymous sources. Apple has not provided a comment on the matter.
The funds were raised in the form of convertible notes, with the conversion to equity dependent on a successful transition to a for-profit model that would eliminate control by the non-profit board and remove caps on investor returns.
Despite recent personnel changes, investor enthusiasm remains high, with many anticipating substantial growth based on projections from OpenAI CEO Sam Altman.
The company is on track to generate $3.6 billion in revenue this year despite incurring losses exceeding $5 billion. It forecasts a significant revenue increase to $11.6 billion next year, according to informed sources.
Investors have also established protections during OpenAI’s complex corporate restructuring, which would enable Altman to receive equity. Discussions regarding these terms are ongoing, with no set timeline for completion.
Some terms negotiated by investors allow them to reclaim their capital or renegotiate the valuation if the proposed changes are not executed within the next two years, sources indicated.
OpenAI's rapid ascent in product popularity and valuation has drawn global attention. Since the introduction of ChatGPT, it has gained 250 million weekly active users. The company's valuation has soared from $14 billion in 2021 to $157 billion, experiencing revenue growth from zero to $3.6 billion—far surpassing Altman's initial projections.
OpenAI has informed investors of its continued pursuit of artificial general intelligence, aiming to develop AI systems that exceed human intelligence while also focusing on commercialization and profitability.
Alejandro Jose Martinez contributed to this report for TROIB News
