OpenAI has successfully closed a historic funding round, raising $6.6 billion at a valuation of $157 billion. This significant investment will fuel the company’s continued pursuit of artificial general intelligence (AGI), as outlined in their blog post.
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Thrive Capital led the funding round, committing $1 billion. Additionally, Reuters reported that Thrive secured a special deal, allowing for an additional $1 billion investment next year at the same valuation if OpenAI meets specific revenue targets.
This funding is contingent upon OpenAI restructuring as a for-profit company. Currently, the company’s for-profit wing is overseen by a nonprofit research body, with investor profits capped at 100x. If OpenAI fails to restructure within two years, investors have the option to request a refund, according to Axios.
In a unique move, OpenAI requested investors to refrain from backing rival start-ups like Anthropic and Elon Musk’s xAI. This funding round, which slightly surpasses xAI’s $6 billion May funding, underscores the immense hype surrounding AI in Silicon Valley.
OpenAI’s valuation of 40 times its reported revenue is unprecedented, reflecting the high expectations for its AI capabilities. The New York Times reported that OpenAI’s monthly revenue reached $300 million in August, and the company anticipates annual sales of $3.7 billion this year, with projected growth to $11.6 billion next year.
The billions raised will be allocated towards the costly process of training AI frontier models. Anthropic CEO Dario Amodei has indicated that AI models costing $1 billion to train are currently in development, and $100 billion models are not far behind. For OpenAI, which aims to build a series of “reasoning” models, these costs are expected to escalate, making ongoing funding rounds crucial.
