OpenAI Secures Historic $6.6 Billion Funding Round, Valuing Company at $157 Billion
OpenAI has closed the largest venture capital round in history, raising $6.6 billion in a deal that values the company at $157 billion post-money. The funding round, led by Thrive Capital, brings OpenAI’s total capital raised to $17.9 billion, according to Crunchbase. Thrive contributed $1.3 billion, with an option to invest an additional $1 billion by 2025. Other participants included Microsoft, Nvidia, SoftBank, Khosla Ventures, Altimeter Capital, Fidelity, and MGX.
Microsoft reportedly invested just under $1 billion, while Nvidia pledged $100 million and SoftBank contributed $500 million, as per The Wall Street Journal. OpenAI plans to use the new funds to bolster its AI research, expand its computing power, and continue developing innovative tools.
In a blog post, OpenAI stated: “This funding allows us to enhance our leadership in frontier AI research and develop solutions that help people tackle tough problems. We’re grateful to our investors and look forward to collaborating with the wider community to create an AI-powered future that benefits all.”
However, this deal may come with unique conditions. The Financial Times reported that OpenAI has requested investors avoid funding competing AI startups, such as Anthropic and xAI. OpenAI, already the most well-funded AI startup globally, stands out further with this unprecedented financing round.
Elon Musk’s xAI, which raised over $6 billion earlier this year, trails far behind OpenAI’s valuation of $157 billion. Similarly, rival Anthropic has raised about half of OpenAI’s total capital. Despite having the edge, OpenAI’s massive fundraising round reflects the need to sustain its costly operations, which include significant investments in AI model training and data science talent.
According to reports, OpenAI has spent around $7 billion on model training and $1.5 billion on staffing. Its flagship product, ChatGPT, has more than 250 million users, with an estimated 10 million paying subscribers. ChatGPT could generate $2.7 billion in revenue this year, contributing to OpenAI’s annualized revenue of $3.4 billion.
While OpenAI projects reaching $100 billion in revenue by 2029, competition is intensifying. Startups like Runway and Luma Labs have launched high-fidelity video generation models ahead of OpenAI, and major tech players like Google, Amazon, and Meta are investing heavily in next-gen AI infrastructure.
Facing these pressures, OpenAI may raise the price of its premium ChatGPT subscription and restructure to attract more investments. The for-profit arm of OpenAI is currently governed by a nonprofit, but CEO Sam Altman has indicated that this governance structure could change soon, allowing for greater investment flexibility.
However, OpenAI’s leadership has experienced a series of high-profile departures, with several key executives leaving in recent months, signaling possible internal tensions over the company’s direction. Only three of the original 13 founders remain with the company. Despite these challenges, OpenAI’s latest funding round gives it the financial muscle to continue shaping the AI landscape.