The firm that created ChatGPT, OpenAI, raised an additional $6.6 billion in capital, increasing its valuation to $157 billion and solidifying its leadership position in the artificial intelligence industry globally.
OpenAI made the historic investment, which is among the biggest in Silicon Valley, public on Wednesday.
OpenAI, which was founded in 2015 and is headed by Sam Altman, intends to utilize the money to expand its AI research, boost processing power, and provide tools for handling challenging issues.
Thrive Capital led the capital round, including participation from SoftBank, Microsoft, Nvidia, Tiger Global, and MGX, an investment group operated by the United Arab Emirates.
Apple, which uses OpenAI models in its generative AI offerings, withdrew from negotiations on participating in the funding.
This investment makes OpenAI the third-largest venture-backed company globally, behind SpaceX and ByteDance.
The company gained prominence in 2022 with the release of ChatGPT, one of the fastest-downloaded apps ever, showcasing the power of generative AI to produce human-like content from simple prompts.
OpenAI followed this with GPT-4, the large language model powering ChatGPT and numerous other AI applications.
The additional cash is anticipated to hasten the release of Sora, a tool for producing films from text commands, and boost the development of GPT-4’s replacement.
According to the IT community, generative AI has the potential to significantly boost productivity and is a disruptive innovation on par with smartphones or PCs.
To stay ahead of the curve, major tech firms like Apple, Google, Microsoft, Meta, Amazon, and Amazon are making significant investments in generative AI.
Wall Street has reached all-time highs as a result of the excitement, and Nvidia, which supplies essential parts for AI training, is now among the largest firms in the world.
According to the Financial Times, OpenAI imposed a condition of exclusivity on investors, barring them from investing in rival AI startups, such as Anthropic or Elon Musk’s xAI.
OpenAI aims to maintain rapid growth despite significant costs for computing power and talent acquisition.
The company has expanded its workforce to 1,700 employees from 700 in just nine months and is projected to lose $5 billion in 2024, with estimated sales of $3.7 billion this year, according to the New York Times.
The cash injection comes at a tumultuous time for OpenAI, with the recent departures by key executives.
Less than a year after the OpenAI board temporarily dismissed Altman due to his aggressive product launches and managerial style, his position within the firm has also expanded.
Employees resisted, and Microsoft, the company’s largest investor, arranged for Altman to return, ending the coup within days.The corporation has since lost the executives and board members who contributed to his departure.
According to reports, the investors insisted on a corporate restructure that would establish the company as an official “for profit” business, more in line with Silicon Valley companies, and validate Altman’s authority.
OpenAI, since its founding in 2015, has been organized as a non-profit, with a board that did not answer to investors and a money making arm run separately.
Although he has refuted the rumors, Altman is reportedly receiving shares in OpenAI, which would make him a multi-billionaire.
Elon Musk, an early investor in the organization, is suing it as well, claiming that since his departure in 2018, OpenAI has strayed from its original non-profit goal.
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