OpenAI has successfully completed a significant funding round, securing $40 billion spearheaded by SoftBank, which elevates the company’s valuation to an impressive $300 billion. This funding round marks a historic milestone, being the largest ever recorded for a private technology firm, according to reporting by CNBC.
OpenAI will receive an initial investment of $10 billion, with SoftBank contributing $7.5 billion and an additional $2.5 billion coming from a consortium of investors, as stated in a report by Bloomberg. The remaining $30 billion is expected to be delivered by the end of the year, contingent on OpenAI transitioning to a for-profit model. Should this transition not occur, the company might forfeit a quarter of the total investment.
This funding announcement follows OpenAI’s recent launch of Stargate, a joint venture worth $500 billion, backed by SoftBank, Oracle, and the Abu Dhabi fund MGX, focused on the development of extensive AI data centers over the next four years. OpenAI has been on a fast track recently; CEO Sam Altman shared that the platform witnessed the addition of 1 million users in just one hour, largely due to the popularity of a new feature, Images in ChatGPT, which generated AI art inspired by Studio Ghibli. Furthermore, Altman indicated plans to release a new open-weight language model featuring reasoning capabilities in the coming months. According to OpenAI’s announcement, ChatGPT currently serves 500 million users weekly.
Despite remarkable growth attributed to ChatGPT, OpenAI continues to face significant cash flow challenges. Recent reports from Bloomberg indicate that the company anticipates generating $12.7 billion in revenue this year, a substantial increase from last year’s $3.7 billion in annual recurring revenue. However, OpenAI does not expect to achieve positive cash flow until 2029, with revenue projections soaring to $125 billion by that year.
The emphasis in OpenAI’s funding announcement is on developing artificial general intelligence (AGI) that will be beneficial for humanity as a whole. Altman has stressed that achieving this ambitious vision will require not only considerable computational power and energy but also a vast global infrastructure and substantial financial resources. This latest funding round is viewed as a pivotal step toward realizing those goals.
