OpenAI, creator of ChatGPT, has secured the largest round of venture capital funding ever recorded. The company recently announced that it raised $6.6 billion in a funding round that values it at $157 billion. The investment was led by Thrive Capital, one of its previous investors, bringing the total raised by OpenAI to $17.9bn, according to Crunchbase.
Backing from tech and financial giants
Thrive Capital injected approximately $1.3bn into the company, with the exclusive option to invest up to an additional $1bn at the same valuation before 2025, according to The New York Times. In addition to Thrive, Microsoft, Nvidia, SoftBank, Khosla Ventures, Altimeter Capital, Fidelity and MGX also participated in the historic round. According to reports in The Wall Street Journal, Microsoft contributed nearly $1 billion, while Nvidia pledged $100 million and SoftBank contributed $500 million.
OpenAI, through a blog post, said the new funding will allow the company to strengthen its leadership in advanced artificial intelligence research, increase its computing power and continue to develop tools that solve complex problems. The company thanked the investors for their confidence and expressed its desire to collaborate with partners, developers and the wider community to build an AI-powered ecosystem that benefits everyone.
Competition and financial challenges
While OpenAI is currently the best-funded AI startup in the world, this new round of funding puts it in a completely different league. While other AI companies, such as Elon Musk's xAI and Anthropic, have raised significant amounts, with valuations of $24 billion and $9.7 billion respectively, none come close to the magnitude achieved by OpenAI.
This massive capital is essential to sustain the operations of OpenAI, which spends billions training and marketing its AI systems, such as the o1 model, and hiring highly skilled staff. According to The Information, the company has spent around $7bn on training models and $1.5bn on its workforce. It is even estimated that maintaining ChatGPT costs OpenAI $700,000 a day.
Looking ahead
OpenAI plans to continue its aggressive growth, projecting revenues of up to $100 billion by 2029. However, it faces fierce competition on multiple fronts, with startups like Runway and Luma Labs leading the way in high-quality video generation, and giants like Google and Amazon investing heavily in infrastructure to train next-generation models. In addition, startups such as Anthropic and Cohere continue to develop solutions that rival ChatGPT.
In an increasingly competitive environment, OpenAI could significantly increase the price of its premium ChatGPT Plus plan and change its corporate structure to attract more investment. Currently, its for-profit division is controlled by a non-profit organisation that limits investors' returns, but there is speculation that OpenAI could abandon this scheme in the coming months in order to have greater freedom to seek long-term capital.