Open AI Chief Executive Officer Sam Altman, center, speaks at the Advancing Sustainable Development through Safe, Secure, and Trustworthy AI Event on Sept. 23, 204, in New York. (Bryan R. Smith/Pool Photo via AP,The Canadian Press)
OpenAI has announced that it has raised $6.6 billion in venture capital, marking a significant move away from its nonprofit beginnings. The funding round was led by Thrive Capital, with major contributions from Microsoft, Nvidia, and SoftBank, according to a source who shared details under the condition of anonymity.
This investment is one of the largest in U.S. history, particularly notable for not relying on a single major investor, according to PitchBook, which tracks venture capital trends. Microsoft, which invested $10 billion into OpenAI last year, has played a key role in the company’s recent growth, similar to how Altria Group invested heavily in Juul in 2018.
OpenAI says the funds will enhance its leadership in cutting-edge AI research, boost its computing capabilities, and accelerate tool development for tackling complex problems. The company now has a market valuation of $157 billion, with the new investment expected to speed up progress toward its mission.
This fundraising is part of OpenAI’s ongoing shift from a nonprofit model to a more commercial structure. While the company already has a for-profit division, its nonprofit board oversees its operations, ensuring that its advancements in AI are safe and beneficial to humanity. However, plans to transition to a public-benefit corporation could change this governance model, allowing more profit potential for investors.
Aside from Thrive Capital, the funding round saw participation from Khosla Ventures, Altimeter Capital, Fidelity, MGX, ARK Invest, and Tiger Global. Microsoft expressed enthusiasm about continuing its partnership with OpenAI, while Nvidia, a key player in AI hardware, declined to comment. The specific amounts contributed by each investor have not been revealed.
Apple, despite rumors of its growing interest in AI, did not participate in this funding round, even though it recently partnered with OpenAI to integrate ChatGPT into its products.
Brendan Burke, a PitchBook analyst, noted that while OpenAI's alliance with Microsoft provides vast computing power, additional funding is necessary to train models and develop proprietary products. He also highlighted the competitive pressure from Elon Musk’s xAI, which recently secured $6 billion to build custom data centers, a sign of growing rivalry in the AI space.
