California/IBNS: American artificial intelligence (AI) research company OpenAI has secured $6.6 billion in investments, potentially valuing the ChatGPT maker at $157 billion, positioning it among the worlds most valuable private enterprises, Reuters reported.
This funding round saw the return of venture capital firms like Thrive Capital and Khosla Ventures, along with continued backing from Microsoft, OpenAIs primary corporate investor.
Additionally, Nvidia has joined as a new investor, according to the report.
The funding coincides with OpenAIs internal restructuring and leadership changes, including the recent departure of longtime Chief Technology Officer Mira Murati.
Other participants in the investment round included Altimeter Capital, Fidelity, SoftBank, and Abu Dhabis state-owned investment firm MGX.
Chief Financial Officer Sarah Friar informed staff on Wednesday (Oct. 2) that OpenAI will soon offer a tender buyback of employee shares, although no specific details or timeline were provided, as reported by Reuters.
Earlier this year, some employees were able to sell shares at a company valuation of $86 billion.
Thrive Capital committed around $1.2 billion, combining its own funds with a special purpose vehicle for smaller investors, and it also negotiated the possibility to invest an additional $1 billion next year, contingent on OpenAI meeting certain revenue targets, reports Reuters.
Despite earlier talks, Apple did not participate in this funding round, Reuters reported, citing its sources.
The tech giant has not commented on the matter.
The funds were raised through convertible notes, meaning they will convert to equity if OpenAI successfully transitions into a for-profit structure and lifts its current cap on investor returns, according to the report.
Even with recent executive changes, investor interest remains strong, spurred by OpenAI CEO Sam Altmans ambitious projections.
The company is expected to generate $3.6 billion in revenue this year, despite losses exceeding $5 billion, while next years revenue is projected to soar to $11.6 billion.
As OpenAI navigates its complex corporate restructuring, including the potential for Altman to receive equity, investors have secured protections.
If structural changes arent made within two years, they may renegotiate the valuation or recover their capital, Reuters reported.
OpenAIs rapid rise has captivated global attention.
Since launching ChatGPT, the company has gained 250 million weekly active users, and its valuation has skyrocketed from $14 billion in 2021 to $157 billion.
Despite surpassing revenue expectations, OpenAI continues to chase the development of artificial general intelligence (AGI), while increasing commercialization efforts to drive profitability, according to reports.
