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OpenAI closes funding at $157 billion valuation, as Microsoft, Nvidia, SoftBank
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OpenAI closes funding at $157 billion valuation, as Microsoft, Nvidia, SoftBank
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OPENAI CLOSES FUNDING AT $157 BILLION VALUATION, AS MICROSOFT, NVIDIA, SOFTBANK
JOIN ROUND

Published Wed, Oct 2 20241:00 PM EDTUpdated Wed, Oct 2 20243:32 PM EDT
Hayden Field@haydenfield
WATCH LIVE
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Key Points
 * OpenAI closed its long-awaited funding round, announcing that it raised $6.6
   billion at a $157 billion post-money valuation.
 * Led by Thrive Capital, the round also had participation from Microsoft and
   Nvidia, CNBC confirmed.
 * Earlier this year, OpenAI was valued at a reported $80 billion, up from $29
   billion in 2023.

OpenAI CEO Sam Altman speaks during the Microsoft Build conference at Microsoft
headquarters in Redmond, Washington, on May 21, 2024.
Jason Redmond | AFP | Getty Images

OpenAI has closed its long-awaited funding round at a valuation of $157 billion,
including the $6.6 billion the company raised from an extensive roster of
investment firms and big tech companies.

While OpenAI didn’t name the investors in Wednesday’s press release, a person
with knowledge of the matter said the round was led by Thrive Capital and
included participation from existing backer Microsoft as well as chipmaker
Nvidia, SoftBank and others. Thrive planned to invest $1 billion in the round,
CNBC previously reported.



OpenAI’s rapid ascent, which began with the launch of ChatGPT in late 2022, has
been the biggest story in the tech industry over the last couple years, bringing
the concept of generative artificial intelligence into the mainstream and paving
the way for tens of billions of dollars of investments in AI infrastructure.

“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,” OpenAI wrote in a blog post Wednesday.

“We look forward to continuing our partnership with OpenAI,” a Microsoft
spokesperson told CNBC in a statement.

OpenAI generated $300 million in revenue last month, up 1,700% since the
beginning of last year, CNBC confirmed last week, following reporting by The New
York Times. The company expects to bring in $11.6 billion in sales next year, up
from $3.7 billion in 2024, according to a person close to OpenAI who asked not
to be named because the financials are confidential.

But all that revenue is extremely costly, as OpenAI has to ramp up purchases of
Nvidia’s graphics processing units (GPUs) to train and run its large language
models. The company expects to lose about $5 billion this year, the person said.
Microsoft has invested billions of dollars in OpenAI and is a key partner as the
software giant bolsters its Azure cloud business.



Earlier this year, OpenAI was valued at a reported $80 billion, up from $29
billion in 2023. Following the viral growth of ChatGPT, momentum has continued
with new products for businesses and an expansion into AI-generated photos and
videos.

OpenAI now has 250 million weekly active users on ChatGPT, CFO Sarah Friar told
CNBC in a statement. There are also 11 million ChatGPT Plus subscribers and 1
million paying business users on ChatGPT, a person close to the company said.

“AI is already personalizing learning, accelerating healthcare breakthroughs,
and driving productivity,” Friar said in the statement. “And this is just the
start.”

OpenAI is experiencing plenty of growing pains along the way, including the loss
of key executives, a trend that continued through last week.

Last Wednesday, OpenAI Chief Technology Officer Mira Murati, who briefly served
as interim CEO, said she would be leaving after 6½ years. Shortly after that,
research chief Bob McGrew and Barret Zoph, a research vice president, said they
were leaving the company.

In an interview the next day at Italian Tech Week, OpenAI CEO Sam Altman said,
“I think this will be hopefully a great transition for everyone involved and I
hope OpenAI will be stronger for it, as we are for all of our transitions.”

Also on Thursday, OpenAI held an all-hands meeting, following the board’s
decision to consider restructuring the company to a for-profit business,
according to a separate person with knowledge of the matter. Altman said the
departures were not related to the potential restructuring, contrary to some
media reports.

Should the change occur, the nonprofit segment would remain as a separate
entity, the source said.

At Thursday’s meeting, Altman denied reports of plans for him to receive a
“giant equity stake” in the company, calling that information “just not true,”
according to a person who was in attendance.

OpenAI Chairman Bret Taylor told CNBC in a statement last week that while the
board has talked about the matter, no specific figures are on the table.

“The board has had discussions about whether it would be beneficial to the
company and our mission to have Sam be compensated with equity, but no specific
figures have been discussed nor have any decisions been made,” Taylor said.

The latest funding round also included participation from Khosla Ventures,
Altimeter Capital, Fidelity, MGX and Tiger Global, sources told CNBC.


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