OpenAI’s multibillion-dollar funding round is now complete, giving the artificial intelligence startup a valuation of $157 billion.
The $6.6 billion raise is one of the largest private investments ever and puts OpenAI among the top three largest startups with venture backing, Bloomberg reported, citing unnamed people familiar with the matter. Elon Musk’s SpaceX and ByteDance, which owns TikTok, are the other two.
Thrive Capital, led by Joshua Kushner, reportedly led the funding round. Tech behemoths Microsoft (MSFT0.00%) and Nvidia (NVDA0.00%) reportedly backed the round, which included investors such as Khosla Ventures, Altimeter Capital, SoftBank (SFTBY+0.75%), and Abu Dhabi–based MGX. Meanwhile, Apple (AAPL+0.25%), which has a partnership with OpenAI to integrate ChatGPT into its iPhone operating system, recently dropped out of talks to participate in the funding round, the Wall Street Journal reported.
The new funding comes amid a spate of executive resignations and reports that OpenAI is spending more than it’s making. The startup’s monthly revenue reached $300 million in August — up 1,700% from the start of 2023, the New York Times reported. The New York Times (NYT+0.54%) added that OpenAI expects to end the year with $3.7 billion in annual sales, according to financial documents its reporters reviewed. However, the startup also anticipates losing around $5 billion this year due to expenses such as running its AI models and paying employees, according to the review. Next year, OpenAI reportedly expects $11.6 billion in revenue.
OpenAI is also reportedly considering restructuring its nonprofit status to attract investors, the Financial Times previously reported, citing unnamed people familiar with the matter. As OpenAI considers a for-profit structure, CEO Sam Altman has reportedly told employees he doesn’t plan to get a “giant equity stake” in the company. In a meeting, both Altman and Sarah Friar, OpenAI’s chief financial officer, told employees the company’s investors are concerned over Altman not having equity, CNBC reported.
Source: Quartz
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