OpenAI, the maker of Artificial Intelligence chatbot ChatGPT, has closed the largest venture capital funding round in history, raising $6.6 billion, which has pushed the company’s valuation to a staggering $157 billion.
The funding round was led by previous investor Thrive Capital, with participation from other tech giants and prominent investment firms, which include Microsoft, Nvidia, Softbank, Khosla Ventures, Altimeter Capital, Fidelity, and MGX.
According to the New York Times, Thrive Capital invested approximately $1.3 billion, with the option to contribute an additional $1 billion at the same valuation through 2025. Microsoft reportedly contributed nearly $1 billion, giant chipmaker Nvidia, invested $100 million, and SoftBank committed $500 million, as reported by The Wall Street Journal.
Tekedia Mini-MBA edition 15 (Sept 9 – Dec 7, 2024) has started registrations; register today for early bird discounts.
Tekedia AI in Business Masterclass opens registrations here.
Join Tekedia Capital Syndicate and invest in Africa’s finest startups here.
In a blog post announcing the new funding, OpenAl expressed gratitude to investors and highlighted plans to strengthen the firm’s leadership in frontier Al research. The company aims to increase computing capacity and continue building tools that solve complex global problems. It further noted that the funding will enable it to double down on Al research, expand compute capabilities, and continue creating solutions that benefit everyone.
The company wrote,
“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. We’re grateful to our investors for their trust in us, and we look forward to working with our partners, developers, and the broader community to shape an AI-powered ecosystem and future that benefits everyone.”
According to Bloomberg, investors in the new round will be able to claw back their cash if OpenAI doesn’t complete the conversion from nonprofit to for-profit within two years. Recall that in last month September, Tekedia reported that the company is preparing for a significant restructuring to transition from its nonprofit roots to a for-profit model.
Since its launch of ChatGPT in late 2022, OpenAl has rapidly ascended as a dominant force in the tech industry, driving the mainstream adoption of generative Al. This rise has led to billions of dollars of investments in Al infrastructure, making OpenAl a central player in the development of artificial intelligence technologies.
ChatGPT has recorded more than 250 million users (around 10 million of which are paying subscribers), and OpenAI’s annualized revenue has reportedly eclipsed $3.4 billion. ChatGPT alone could bring in $2.7 billion this year, The New York Times reports, citing internal OpenAI docs.
The company’s financials reveal both massive revenue growth and significant expenses, OpenAl generated $300 million in revenue in September 2024, marking an incredible 1,700% increase since the start of 2023. Next year, the company expects revenue to reach $11.6 billion, up from $3.7 billion in 2024. OpenAI optimistically projects its revenue will reach $100 billion in 2029.