OpenAI just closed a record-breaking fundraising round.
On Monday, the ChatGPT-maker announced that it had raised $40 billion, with Japan’s SoftBank contributing $30 billion and investors like Microsoft and Thrive investing the rest, at a $300 billion valuation. It’s the biggest tech funding round on record from a private company, per CNBC.
OpenAI says it will use the funds to power AI research, buy AI chips and infrastructure, and create AI tools for ChatGPT’s now 500 million global weekly users. OpenAI last reported 400 million weekly users for ChatGPT in February.
About $18 billion of the funding will go towards Stargate, a joint venture between SoftBank, OpenAI, and Oracle announced in January to build AI data centers in the U.S.
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“Hundreds of millions of people use ChatGPT each week,” OpenAI CEO Sam Altman said in a statement on Monday, per Bloomberg. “This investment helps us push the frontier and make AI more useful in everyday life.”
OpenAI will receive $10 billion right away and $30 billion by the end of the year. However, there’s fine print to the deal: To receive the $30 billion, OpenAI has to transition to become a for-profit company by the end of the year, per Reuters. OpenAI currently consists of a nonprofit parent company and a for-profit arm, with the nonprofit board governing all of OpenAI’s activities.
In December, the startup proposed a plan to spin off its for-profit business into a Delaware-based corporation that runs and controls its business and operations. According to the Wall Street Journal, both OpenAI’s largest shareholder, Microsoft, and the California attorney general need to approve of the plan and have yet to do so.
The fundraising round nearly doubles OpenAI’s valuation from its previous peak of $157 billion in October after a $6.6 billion fundraising round. Now, OpenAI is among the most valuable private companies in the world, joining the ranks of startups like SpaceX, valued at $350 billion in December, and TikTok’s parent company ByteDance, worth around $300 billion in November.
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