OpenAI has secured the largest venture capital round ever, raising $6.6 billion and reaching a post-money valuation of $157 billion. The funding round was led by Thrive Capital, which contributed $1.3 billion and holds an option to invest an additional $1 billion. Other notable participants included Microsoft, Nvidia, SoftBank, Khosla Ventures, and Fidelity. OpenAI plans to use the funds to enhance its AI research, expand computing capacity, and continue developing solutions for complex problems.
OpenAI raises the largest-ever round of investment ($6.6B) at a jaw-dropping valuation ($157B).
What is unusual is all of this happening parallel to executives & cofounders quitting on a steady stream the last months.
Hard to deny that no one can raise funds like Sam Altman can
— Gergely Orosz (@GergelyOrosz) October 2, 2024
The funding comes with potential strings attached, as OpenAI reportedly asked investors to avoid backing rival companies such as Anthropic and xAI. OpenAI, which is already the best-funded AI startup, has now raised a total of $17.9 billion. Its market leadership in AI is clear, with products like ChatGPT boasting 250 million users and annual revenue projections of $3.4 billion. However, rising competition from companies like Anthropic, Google, and Meta, coupled with the hefty costs of AI development, have pushed OpenAI to seek more funding.
#OpenAI closing a $6.6B funding round, raising its valuation to $157B. @Kr00ney reports: pic.twitter.com/l4K0tmd2Y0
— CNBC's Closing Bell (@CNBCClosingBell) October 2, 2024
The company has faced significant internal changes, including a wave of high-profile resignations from key executives like CTO Mira Murati and Chief Research Officer Bob McGrew. CEO Sam Altman has indicated that OpenAI will transition from nonprofit to for-profit governance, enabling it to explore larger, capital-intensive projects like building its own AI chips and datacenters. The future trajectory of OpenAI will depend on its ability to maintain its market leadership while navigating competitive pressures and internal restructuring.
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