OpenAI has raised $6.6 billion from investors at a post-money valuation of $157 billion, the company announced on Wednesday, cementing the ChatGPT maker’s status as one of the most valuable private companies in the world.
The funding has attracted returning venture capital investors including Thrive Capital and Khosla Ventures, as well as OpenAI’s biggest corporate backer Microsoft, and new participation from Nvidia.
The closing of the funds coincides with the company’s ongoing restructuring efforts and executive changes, including the abrupt departure of its longtime Chief Technology Officer, Mira Murati, last week.
Altimeter Capital, Fidelity, SoftBank, Abu Dhabi’s state-backed investment firm MGX also participated in the round.
The funding came in the form of convertible notes, and hinges on a successful structural change into a for-profit that would no longer be controlled by the non-profit board and the removal of cap on returns for investors.
The personnel changes haven’t deterred enthusiasm from most investors, who are anticipating significant growth based on the projections by OpenAI CEO Sam Altman and CFO Sarah Friar.
The company is on pace to generate $3.6 billion in revenue this year on mounting losses of over $5 billion. It projects major revenue jump next year to $11.6 billion, according to sources familiar with the figures.
Investors have also secured some protections as OpenAI undergoes the complex corporate restructuring that would grant Altman equity. The talks are still ongoing, and no timeline has been determined yet.
Investors have negotiated terms that would allow them to claw back their capital or renegotiate the valuation if the changes are not implemented within two years, sources said.
OpenAI’s meteoric rise in terms of product popularity and valuation has captured the world’s imagination. Since the launch of ChatGPT, it has attracted 250 million weekly active users. The company’s valuation has also risen from $14 billion in 2021 to $157 billion as it grew revenue from zero to $3.6 billion, far exceeding Altman’s own projections at the time.
The company has told investors it is still actively pursuing artificial general intelligence (AGI), meaning developing AI systems that surpass human intelligence, as it ramps up commercialization and tries to be profitable.