ChatGPT maker OpenAI closes funding round; becomes third-largest startup in the world with investment from these companies – Times of India

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ChatGPT maker OpenAI has successfully raised $6.6 billion from investors, bringing its post-money valuation to $157 billion. This significant funding round solidifies OpenAI’s position as one of the world’s most valuable private companies.
OpenAI’s rapid rise in product popularity and valuation has captivated global attention. Since launching ChatGPT, it has attracted 250 million weekly active users.The company’s valuation soared from $14 billion in 2021 to $157 billion, with revenue growing from zero to $3.6 billion, surpassing Altman’s initial projections. According to Bloomberg, investors in the new round can reclaim their investment if OpenAI doesn’t complete its conversion to a for-profit entity within two years.

Microsoft and Nvidia among biggest investors

The investment was spearheaded by Thrive Capital, led by Josh Kushner, with contributions from Khosla Ventures, Altimeter Capital, and Fidelity Management & Research Company. Notable backers include Microsoft Corp., which has already invested $13 billion in OpenAI, and Nvidia Corp., whose processors are crucial to the AI industry. Global investors such as SoftBank Group Corp. and the new Abu Dhabi-based tech investment firm MGX also participated.

Apple stays away

Apple Inc did not participate in this funding round, despite previous discussions. The iPhone maker has a partnership with OpenAI to integrate ChatGPT into its devices and Siri voice assistant. Plans for Apple to gain a board observer role were dropped, according to sources familiar with the matter. Reports suggest that Apple left the deal table at the last moment.

Funding comes after management flux

This funding round aligns with OpenAI’s ongoing restructuring and executive changes. Recently, longtime Chief Technology Officer Mira Murati, Chief Research Officer Bob McGrew, and Research VP Barret Zoph resigned. Of the original 13 founders from 2015, only three remain.
The funds were raised through convertible notes, contingent on OpenAI’s transition to a for-profit structure, removing the non-profit board’s control and lifting the cap on investor returns.
Despite the executive changes, investor enthusiasm remains high, driven by growth projections from CEO Sam Altman and CFO Sarah Friar. OpenAI is expected to generate $3.6 billion in revenue this year, despite losses exceeding $5 billion, with a projected revenue jump to $11.6 billion next year.
Investors have secured protections during OpenAI’s complex restructuring, which includes granting equity to Altman. Negotiations are ongoing, with no set timeline. Terms allow investors to reclaim their capital or renegotiate the valuation if changes aren’t implemented within two years.

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