OpenAI Lands $6.6B in Funding, Backed by Microsoft and Nvidia Investors

Venture capitalists like Thrive Capital and Khosla Ventures have come back to invest in the company, and Nvidia has joined as a new investor. Microsoft is OpenAI’s biggest business backer.

OpenAI has received $6.6 billion from investors. This means that the company may now be worth $157 billion, making it one of the world’s most valuable private companies.

Venture capitalists like Thrive Capital and Khosla Ventures have come back to invest in the company, and Nvidia has joined as a new investor. Microsoft is OpenAI’s biggest business backer.

The funds were closed at the same time that the company was restructuring and making changes to its leadership. For example, Mira Murati, the company’s long-time Chief Technology Officer, quit suddenly last week.

Altimeter Capital, Fidelity SoftBank, and MGX, an investment company backed by the government of Abu Dhabi, also took part in the round.

A source says that OpenAI’s Chief Financial Officer Sarah Friar told employees on Wednesday that the company will be able to buy back their shares in the company for cash after the funding. But no specifics or times have been set. Early this year, when the company was worth $86 billion, some employees were able to cash out their shares.

Sources say that Thrive Capital, which put in about $1.2 billion from its own fund and a special vehicle for smaller investors, has the option to put in another $1 billion next year at the same value if the AI company meets a revenue goal.

Sources, who asked to remain anonymous to talk about private issues, said that Apple was in talks to invest in OpenAI but did not end up doing so. Apple did not answer right away when asked for a statement.

The money was given in the form of convertible notes, and the change to stock depends on the company being able to successfully become a for-profit business that is no longer run by the non-profit board and investors’ returns not being limited.

The company is on track to make $3.6 billion this year, even though it is losing more than $5 billion. Sources who know about the numbers say that it expects sales to jump a lot next year, to $11.6 billion.

Investors have also gotten some protections while OpenAI goes through the complicated reorganization that will give Altman stock. The talks are still going on, and there is still no set date for when they will end.

Sources say that investors have agreed to terms that let them get their money back or renegotiate the value if the changes aren’t made within two years.

Everyone in the world is amazed at OpenAI’s meteoric rise in product fame and value. Twenty-five million people use ChatGPT every week since it first came out. Since 2021, the company’s value has grown from $14 billion to $157 billion, and its sales have gone from nothing to $3.6 billion, which was a lot more than Altman thought it would make.

The business has told investors that it is still working on artificial general intelligence (AGI), which means making AI systems smarter than humans, even as it tries to make more money and speed up commercialization.