Executive changes and rapid growth push OpenAI forward as it raises $6.6bn to expand AI leadership
OpenAI has closed its highly anticipated funding round, reaching a valuation of $157bn, as reported by CNBC.
The company raised $6.6bn from a variety of investors, including several big tech companies and investment firms.
Although OpenAI did not disclose the names of the investors in its press release on Wednesday, a source familiar with the matter confirmed that Thrive Capital led the round.
Existing investors such as Microsoft, Nvidia, and SoftBank also participated. Thrive Capital was earlier reported to be investing $1bn in the round.
OpenAI’s rise to prominence has been fast, with the release of ChatGPT in late 2022 bringing generative AI into the mainstream. This breakthrough spurred tens of billions of dollars in investments into AI infrastructure.
OpenAI shared its plans in a blog post following the announcement of the funding round: “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.”
Microsoft, one of OpenAI's major investors and strategic partners, reiterated its support. “We look forward to continuing our partnership with OpenAI,” a Microsoft spokesperson told CNBC.
OpenAI’s financial trajectory has been steep, with $300m in revenue generated last month alone—a 1,700 percent increase since the start of last year. CNBC recently confirmed that the company projects $11.6bn in revenue next year, compared to an expected $3.7bn in 2024.
Despite the revenue growth, the company’s expenses remain high, particularly due to the cost of acquiring Nvidia’s GPUs, which are essential for training and running its large language models. A source close to OpenAI revealed that the company expects to lose around $5bn this year.
Microsoft has invested billions in OpenAI, and its Azure cloud platform plays a crucial role in supporting OpenAI’s operations.
Earlier this year, OpenAI was valued at $80bn, a significant rise from its $29bn valuation in 2023. The success of ChatGPT has driven OpenAI’s expansion, with the company launching AI-generated photo and video products in addition to its core offerings.
Currently, OpenAI has 250 million weekly active users on ChatGPT, with 11 million ChatGPT Plus subscribers and 1 million business users, according to company sources.
However, the rapid growth has also brought challenges. OpenAI recently experienced key executive departures. Last week, Chief Technology Officer Mira Murati announced her resignation after serving 6 and half years with the company, including a brief period as interim CEO.
Shortly after, research leaders Bob McGrew and Barret Zoph also departed.
In a recent interview at Italian Tech Week, CEO Sam Altman discussed the transitions, stating, “I think this will be hopefully a great transition for everyone involved and I hope OpenAI will be stronger for it, as we are for all of our transitions.”
In addition to the leadership changes, the company’s board has been considering restructuring OpenAI into a for-profit entity. According to a source, the nonprofit segment would remain separate if the transition occurs.
During an all-hands meeting on Thursday, Altman denied media reports suggesting he would receive a substantial equity stake in the company, calling those claims “just not true,” according to someone present.
OpenAI Chair Bret Taylor also commented on the matter, telling CNBC, “The board has had discussions about whether it would be beneficial to the company and our mission to have Sam be compensated with equity, but no specific figures have been discussed nor have any decisions been made.”
The latest funding round also saw participation from several prominent investors, including Khosla Ventures, Altimeter Capital, Fidelity, MGX, and Tiger Global, according to CNBC’s sources.
