OpenAI, the company behind ChatGPT, raised $6.6 billion in a funding round led by Thrive Capital, bringing its valuation to $157 billion. An investment which strengthens the position of Sam Altman's company in artificial intelligence (AI) research and which, perhaps, precedes its IPO.
Record funding to accelerate OpenAI's growth
OpenAI, known for its advanced language model ChatGPT, announced a colossal $6.6 billion fundraising, the largest venture capital funding round ever.
This record is closely followed by Stripe's fundraising of $6.5 billion in March 2023. Next comes xAI, Elon Musk's startup, which raised $6 billion in May 2023.
This operation, led by Thrive Capital, brings OpenAI's valuation to a staggering $157 billion. Thrive Capital, already an investor in OpenAI, this time injected $1.3 billion, while retaining an exclusive option to invest an additional $1 billion by 2025. This round of funding also saw the participation of historic investors such as Microsoft, Nvidia, SoftBank and Khosla Ventures.
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Microsoft, a strategic partner of OpenAI, contributed approximately $750 millionadding to its 13 billion already injected into the company. Nvidia, for its part, invested $100 million, while SoftBank put $500 million on the table.
This massive capital injection will allow OpenAI to strengthen its computing capacity and continue its research efforts in cutting-edge AI technologies. “ The new funding will allow us to strengthen our leadership in artificial intelligence research, increase our computing capacity and continue to build tools that help people solve complex problems, » said OpenAI in the press release announcing the news.
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A transition to a for-profit model and future challenges
Historically founded as a non-profit organization, OpenAI plans to move to a for-profit company structure to attract more investment to support its expensive projects.
This transition aims to give the company greater flexibility to explore ambitious projects such as creating its own data centers and AI chips to reduce its dependence on Nvidia – which invested in this new funding round. However, this change is not without risks. According to Bloomberg, some investors in this round will have the option to withdraw their funds if the transformation is not finalized within 2 years.
Among the concerns raised, OpenAI asked its investors to refrain from supporting competing startups such as Anthropic or xAI. Although this request is unusual, it highlights OpenAI's desire to consolidate its lead in a growing sector and limit the influence of its competitors in the market.
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While its flagship generative AI ChatGPT has more than 250 million users, including 10 million paying subscribers, OpenAI has established itself as the undisputed leader in generative AI. The company projects annual revenue of $3.4 billion, with $2.7 billion generated by ChatGPT alone. Longer term, OpenAI projects revenues reaching $100 billion by 2029, a figure comparable to the current revenues of giants like Nestlé.
However, this rapid growth comes with massive spending. According to some sources, OpenAI has already spent more than $7 billion training its models and $1.5 billion on its staff. To maintain this momentum, the company could consider doubling the price of its premium ChatGPT Plus subscription, currently at $20 per month, to $44 by 2029.
This fundraising and transition to a for-profit model could also pave the way for an IPO in the coming years.
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Source: Press release
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