OpenAI Secures $6.6 Billion in Funding to Boost AI Research

According to the news sources like Reuters, OpenAI has successfully raised $6.6 billion in new funding which has raised its valuation to $157 billion. The company plans to use this money to enhance the AI research and expand its computing capabilities.

Thrive Capital led the funding round with a contribution of $1.3 billion. Microsoft is the biggest investor, added about $750 million to its earlier investment of $13 billion. Other investors included Khosla Ventures, Fidelity Management, and Nvidia, which makes the important hardware needed for AI development.

This funding deal is one of the largest private investments ever and positions OpenAI alongside major startups like SpaceX and TikTok’s parent company, ByteDance. The investment reflects the strong belief of tech industry in the potential of AI.

Several other investors also contributed significant amounts, such as Tiger Global Management invested $350 million, and Altimeter Capital put in at least $250 million. Global investors like SoftBank and Abu Dhabi-based MGX joined the round with SoftBank contributing $500 million.

In a statement OpenAI said the funding would help accelerate AI research and computing capabilities. Sarah Friar the CFO of OpenAI emphasized that AI is already making significant impacts in areas like education and healthcare, stating, “This is just the start.”

High value of OpenAI has caught the attention of Silicon Valley and tech experts are taking about it. CEO of Altimeter Brad Gerstner said that people were surprised by the $157 billion valuation.

Although Apple was previously in talks to invest in OpenAI but it did not participate in this funding round. Apple and OpenAI have a partnership that integrates ChatGPT into Apple devices and Siri.

Some of the funding was arranged through special purpose vehicles (SPVs), allowing investors to pool their money. Thrive Capital utilized an SPV for part of its investment.

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Last November, CEO Sam Altman was fired and then quickly rehired. The company has since made significant changes to its board and staff, hiring hundreds of new employees while losing some key leaders, so OpenAI journey is also not stable.

OpenAI is considering a shift from its nonprofit model to a for-profit one to gain more investments.

After the launch of ChatGPT, OpenAI has captured a lot of attention in the world of AI. The chatbot has 250 million weekly active users, and about 11 million paid subscribers.