OpenAI has found a way to close a massive $40 billion private financing round, the biggest tech funding deal in history. This significant influx of capital elevates OpenAI’s valuation to an impressive $300 billion, trailing only behind SpaceX, valued at $350 billion, and matching ByteDance, the parent company of TikTok, among the world’s most highly valued private enterprises.
SoftBank is the round’s leader by a long margin with a $30 billion investment. Joining Microsoft in this syndicate of investors are Coatue, Altimeter, and Thrive. In other words, OpenAI is poised for explosive expansion. Given that robust support, the firm is projecting its revenue will triple to $12.7 billion by year’s end. Well, OpenAI just announced that ChatGPT, its flagship AI product, has achieved a staggering 500 million weekly users. This is up from 400 million users just last month’s announcement.
Already, a significant portion of the newly added money, about $18 billion, is set aside for OpenAI’s deepening engagement with Stargate. This strategic allocation of resources further demonstrates OpenAI’s long-term commitment to shaping robust and beneficial AI technologies. Market for generative AI is projected to go over $1 trillion in revenue in the next 10 years. This enormous growth only underscores OpenAI’s unparalleled position in the industry.
To be clear, OpenAI’s current structure is indeed singular – they became a capped-profit limited partnership in 2019. Despite the incorporation, the original nonprofit organization still holds majority control as the sole non-profit shareholder. Change may be coming with upcoming restructuring plans. In the unlikely event that OpenAI can’t reform, the nonprofit would be reactivated as an independent organization. One curious provision might cut OpenAI’s valuation by as much as $10 billion. This would occur unless the tech company manages to complete its conversion to a for-profit organization by the end of the year.
OpenAI’s new chief operating officer, Brad Lightcap, will assume oversight with the company’s engineering-heavy strategic growth plan. He’ll be in charge of both the business side and day-to-day, moving forward. According to the company, this change has been made to improve collaboration and drive the company towards its lofty objectives.
CoreWeave recently became the first public pure-play AI company to go public. This round of fundraising is a testament to the unprecedented enthusiasm for and investment in AI technologies. OpenAI’s venture backers have received convertible notes that are set to convert into equity, further cementing their commitment to the company’s future.
Sam Altman, CEO of OpenAI, remarked on the rapid growth and widespread adoption of ChatGPT:
“one of the craziest viral moments i’d ever seen, and we added one million users in five days” – Sam Altman
This is a testament to the amazing new ways generative AI will allow businesses to engage with consumers and promote technological innovation.