OpenAI raises $40B, now valued $300B
OpenAI has raised a $40 billion funding round, taking its valuation to $300 billion. The round, led by Japan’s SoftBank Group, is the largest venture capital investment so far. SoftBank invested 75% of the capital, with others contributing from Microsoft, Coatue Management, Altimeter Capital, and Thrive Capital.
The funds are split into two tranches: an initial $10 billion injection, followed by an additional $30 billion subject to OpenAI’s conversion into a for-profit corporation within the end of this year. Non-restructuring could imply a $20 billion reduction in SoftBank’s commitment.
This huge investment reflects the increasing interest in artificial intelligence and puts OpenAI among the globe’s most valuable private companies. The money will be invested in furthering AI research, building computational infrastructure, and enhancing programs like ChatGPT, which currently has 500 million weekly users.
In a strategy shift, OpenAI is planning to launch its initial open-weight AI model since 2019’s GPT 2. This initiative attempts to achieve harmony between proprietary developments and collaborative innovation in the AI space.
OpenAI is also working jointly with SoftBank and Oracle on the $500 billion Stargate Project that seeks to develop AI data centers throughout the United States in the next four years.
Though expecting robust top-line growth, OpenAI anticipates negative cash flow through 2029, highlighting the enormous investment needed to attain artificial general intelligence for the good of the world.
