OpenAI closes an investment round that brings the company 6.6 billion in fresh capital. Nvidia is the most notable new investor.
An investment round has brought in 6.6 billion in fresh capital to OpenAI. The company’s valuation rises to $157 billion, making OpenAI one of the most valuable private start-ups. The investors include Thrive Capital, SoftBank and Abu Dhabi-based MGX.
Microsoft also once again pulled out the purse strings for OpenAI. A notable newcomer is Nvidia, which is investing in OpenAI for the first time. Apple was in the running for a long time, but pulled out at the last minute .
OpenAI also wants to share the fresh capital with its own employees. Employees will receive an offer to sell back their shares in the company.
Commercial company
OpenAI is in full transition from nonprofit organization to for-profit commercial company. That transition means investors will judge it more strictly on revenue and profit metrics. OpenAI says it is on its way to $3.6 billion in annual revenue, but the costs to keep ChatGPT running far exceed that amount. Investors have reportedly been informed that ChatGPT’s prices will increase to boost revenue.
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At the same time, OpenAI is facing increasing competition. Every self-respecting technology company wants a finger in the AI pie. That competition comes equally from the camp of its own investors. Just yesterday, Nvidia unveiled an open source model to compete directly with GPT-4o.