OpenAI has closed its long-awaited funding round at a valuation of $157 billion, including the $6.6 billion the company raised from an extensive roster of investment firms and big tech companies.
While OpenAI didn’t name the investors in Wednesday’s press release, a person with knowledge of the matter said the round was led by Thrive Capital and included participation from existing backer Microsoft as well as chipmaker Nvidia, SoftBank and others. Thrive planned to invest $1 billion in the round, CNBC previously reported.
OpenAI’s rapid ascent, which began with the launch of ChatGPT in late 2022, has been the biggest story in the tech industry over the last couple years, bringing the concept of generative artificial intelligence into the mainstream and paving the way for tens of billions of dollars of investments in AI infrastructure.
“The new funding will allow us to double down on our leadership in frontier AI research, increase compute capacity, and continue building tools that help people solve hard problems,” OpenAI wrote in a blog post Wednesday.
OpenAI generated $300 million in revenue last month, up 1,700% since the beginning of last year, CNBC confirmed last week, following reporting by The New York Times. The company expects to bring in $11.6 billion in sales next year, up from $3.7 billion in 2024, according to a person close to OpenAI who asked not to be named because the financials are confidential.
But all that revenue is extremely costly, as OpenAI has to ramp up purchases of Nvidia’s graphics processing units (GPUs) to train and run its large language models. The company expects to lose about $5 billion this year, the person said. Microsoft has invested billions of dollars in OpenAI and is a key partner as the software giant bolsters its Azure cloud business.
Earlier this year, OpenAI was valued at a reported $80 billion, up from $29 billion in 2023. Following the viral growth of ChatGPT, momentum has continued with new products for businesses and an expansion into AI-generated photos and videos.
OpenAI now has 250 million weekly active users on ChatGPT, CFO Sarah Friar told CNBC in a statement. There are also 11 million ChatGPT Plus subscribers and 1 million paying business users on ChatGPT, a person close to the company said.
“AI is already personalizing learning, accelerating healthcare breakthroughs, and driving productivity,” Friar said in the statement. “And this is just the start.”
OpenAI is experiencing plenty of growing pains along the way, including the loss of key executives, a trend that continued through last week.
Last Wednesday, OpenAI Chief Technology Officer Mira Murati, who briefly served as interim CEO, said she would be leaving after 6½ years. Shortly after that, research chief Bob McGrew and Barret Zoph, a research vice president, said they were leaving the company.
In an interview the next day at Italian Tech Week, OpenAI CEO Sam Altman said, “I think this will be hopefully a great transition for everyone involved…
Read More: OpenAI raises at $157 billion valuation; Microsoft, Nvidia join round