OpenAI, which developed viral generative artificial intelligence (AI) platform ChatGPT, has raised $6.6 billion (R114 billion) in its latest round of funding.
The capital raise sees the Microsoft-backed company now valued at $157 billion (R2.7 trillion), says OpenAI in a blog post.
“We are making progress on our mission to ensure artificial general intelligence benefits all of humanity,” says OpenAI.
According to the start-up, every week, over 250 million people around the world use ChatGPT to enhance their work, creativity and learning.
“Across industries, businesses are improving productivity and operations, and developers are leveraging our platform to create a new generation of applications. And we’re only getting started,” it adds.
“We’ve raised $6.6 billion in new funding at a $157 billion post-money valuation to accelerate progress on our mission. The new funding will allow us to double down on our leadership in frontier AI research, increase compute capacity and continue building tools that help people solve hard problems.
“We aim to make advanced intelligence a widely accessible resource. We’re grateful to our investors for their trust in us, and we look forward to working with our partners, developers and the broader community to shape an AI-powered ecosystem and future that benefits everyone. By collaborating with key partners, including the US and allied governments, we can unlock this technology's full potential.”
While OpenAI did not disclose the investors, Reuters reports the funding 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.
Over the years, OpenAI received significant funding from a variety of sources, including private investors, venture capital and partnerships with tech companies.
The company was initially founded in 2015 with a commitment of $1 billion in funding from major tech figures Elon Musk, Sam Altman, Reid Hoffman, Peter Thiel and others.
In 2019, Microsoft invested $1 billion in OpenAI to support the development of artificial general intelligence and ensure it benefits humanity. This partnership involved the use of Microsoft’s Azure cloud platform for OpenAI’s large-scale AI training.
In January 2023, Microsoft expanded its relationship with OpenAI with another reported $10 billion investment over several years.
This deal further strengthened their partnership, giving Microsoft significant influence over OpenAI’s research and commercial endeavours. It also facilitated the integration of OpenAI’s models into Microsoft's products, like Azure AI, and services like ChatGPT in Microsoft Office.
OpenAI started as a non-profit organisation when it was founded in 2015. At the time, it said the goal was to promote the safe and transparent development of AI that benefits all of humanity.
However, in 2019, OpenAI transitioned to a “capped-profit” model with the formation of OpenAI LP, a for-profit entity.
According to the company, this was done to attract significant capital for the expensive research and development required to build cutting-edge AI models like GPT-3 and GPT-4.
The “capped-profit” model means investors can earn a return on their investment, but their profits are capped at a certain multiple (100x in the case of early investors), after which the excess profits go to OpenAI’s non-profit arm to support its broader mission.
This structure allows OpenAI to combine the flexibility of a for-profit company with the long-term goals of a non-profit, it says.
Share