OpenAI said it has completed a deal to raise $6.6 billion in new funding, giving the artificial intelligence company a $157 billion valuation, and bolstering its efforts to build the world's leading generative AI technology.
The deal is one of the largest-ever private investments, and makes OpenAI one of the three largest venture-backed startups, alongside Elon Musk's SpaceX and TikTok owner ByteDance Ltd. The size of the investment underscores the tech industry's belief in the power of AI, and its appetite for the extremely costly research powering its advancement.
The funding round was led by Thrive Capital, the venture capital firm headed up by Josh Kushner, with participation from investors including Khosla Ventures, Altimeter Capital and Fidelity Management & Research Company. Other backers include Microsoft Corp., which has already invested $13 billion in the startup, and Nvidia Corp., the chipmaker whose powerful processors are at the center of the AI boom.
Global investors including SoftBank Group Corp. and the new Abu Dhabi-based tech investment firm MGX also participated.
Apple Inc. did not participate in the deal, although the company was previously in talks to invest in the round, Bloomberg has reported. The iPhone maker has a partnership with OpenAI to integrate ChatGPT on its devices and through its Siri voice assistant. As part of that partnership, Apple was previously in discussions to get a board observer role on OpenAI's board, although those plans were dropped, people familiar told Bloomberg.
The massive funding round follows a turbulent year for OpenAI. Last November, the company's board fired and then quickly rehired its Chief Executive Officer Sam Altman. In the following months, the company has remade its board, hired hundreds of new employees and lost several key leaders, including co-founder Ilya Sutskever and Chief Technology Officer Mira Murati.
At the same time, OpenAI is discussing moving from its nonprofit structure - an unusual organization that has frustrated investors - to a for-profit model. The move would appease the company's backers, but could pose legal hurdles. As part of a transition, OpenAI has discussed awarding Altman equity in the company "- a stake that could be worth more than $10 billion, though OpenAI's board said it has not discussed specific numbers.
OpenAI kicked off a Silicon Valley obsession with the potential of AI when it debuted its chatbot, ChatGPT, in 2022. The tool can generate human-sounding responses to questions, and has amassed 250 million weekly active users, according to a person familiar with the matter who asked not to be identified discussing private information. Its paid service, ChatGPT Plus, has 11 million subscribers, the person said, and its business-focused service has 1 million users.
A slate of new companies have sprung up to compete with OpenAI in recent years, including several that have been founded by former OpenAI employees - such as Anthropic and Safe Superintelligence. OpenAI is also facing intense competition from larger tech companies with vast resources, including Google and Amazon.com Inc., which are also developing their own AI models.
