OpenAI has just closed a massive funding round, bringing in a staggering $6.6 billion at a valuation of $157 billion. This latest influx of cash will fuel the company’s ambitious goal of creating artificial general intelligence (AGI), as noted in a recent company blog post.
The biggest player in this round? Thrive Capital, which led the investment with a whopping $1 billion. According to the Financial Times, Thrive managed to secure a special deal. They’ve locked in the option to pour in another $1 billion next year at the same valuation—provided OpenAI hits certain revenue milestones, according to Reuters.
But there’s more to the story. These funds come with strings attached. OpenAI, currently structured as a for-profit entity overseen by a nonprofit, is rumored to be on the brink of a major restructuring. If the company doesn’t switch to a fully for-profit model within two years, Axios reports that investors have the option to pull their money out. The buzz is that OpenAI could take the same route as Anthropic by becoming a public benefit corporation, according to last week’s Reuters report.
In a rather bold move, OpenAI has also asked its investors to avoid putting their money into competing AI ventures, including Elon Musk‘s xAI and, notably, Anthropic. Talk about exclusivity! And for context, OpenAI’s latest funding slightly edges out Musk’s xAI, which raised a cool $6 billion back in May.
Now, if you’re wondering why investors are throwing money at OpenAI, it’s all about the numbers. The company’s valuation stands at a jaw-dropping 40 times its revenue, according to The Information. OpenAI pulled in $300 million in monthly revenue as of August, and they’re expecting to hit about $3.7 billion in sales by the end of the year, according to the New York Times. By next year? They’re eyeing an even more ambitious $11.6 billion in revenue. These aren’t just dreams; they’re metrics fueling the tech industry’s AI gold rush.
What’s all this cash going to be used for? In short, it’s about building even more advanced AI models—models that are becoming incredibly expensive to develop. Anthropic CEO Dario Amodei has hinted that some AI models in development cost $1 billion to train, and we might see $100 billion models sooner than we think. OpenAI, for its part, is aiming to develop models that can “reason,” which will send costs soaring further. That’s why big investments like this are essential to keeping their ambitions alive.
This latest round of funding not only underscores the excitement surrounding AI but also the extraordinary financial stakes involved in leading the next frontier of technology. Buckle up—it’s clear the AI race is only heating up.
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