OpenAI secured a massive $6.6 billion in funding from investors, bringing its total valuation to $157 billion. Thrive Capital, Microsoft, and Nvidia are among the leading investors involved.
This announcement has made Open AI presently one of the most worthy private companies around the globe. The announcement came out on October 2nd, Wednesday in the company’s blog post.
Microsoft pledged $990 million, and Nvidia pledged $100 million to fund the project. It invested $500 million in the company. This new round of funding takes OpenAI’s total funding to $17.9 billion, as per Crunchbase. Thrive Capital, which invested about $1.2 billion, negotiated an option to invest an additional $1 billion the next year if OpenAI would reach some revenue targets. Other contributors included Altimeter Capital, Fidelity, SoftBank, and Abu Dhabi’s MGX.
According to a recent blog, the company has disclosed that it would utilize this fund to boost its research capacity. OpenAI further stated that it will increase its computing power and foster the creation of solutions to various issues.
The need for a large amount of capital is because OpenAI has many expenses to cover. It has been estimated that the company spends billions of dollars on training models and recruitment of new talents.
OpenAI’s Valuation Skyrockets Amid ChatGPT’s Growing User Base
OpenAI’s valuation has also risen in the past years, going from $29 billion in 2023 to $80 billion in early 2024. This expansion has been accelerated by the adoption of ChatGPT, which now has 250 million weekly active users, 11 million of whom are ChatGPT Plus subscribers and 1 million business users.
OpenAI anticipates that the revenue will increase from $3.7 billion in 2024 to $11.6 billion in 2025. However, this projected growth is coupled with a $5 billion loss this year due to the high cost of research.
The funding announcement comes at the same time as OpenAI, which is planning a major reorganization. The company has shifted from a non-profit organization as well as changes in the leadership structure of the company.
OpenAI’s CEO Sam Altman is reportedly expected to have a large stake in the company, enabling the firm to meet its objectives and further growth plans. At the same time, OpenAI is planning on raising the price of its ChatGPT Plus subscription from $20 to $44 a month by 2029
However, recent changes in the leadership of the company have raised questions as to the direction that the company is taking. Top executives, CTO Mira Murati and research VP Barret Zoph have recently left the company.
Additional reporting by Noor Bazmi.
