Leadership turmoil, rumors of an AI bubble and a failed CEO coup last year didn’t stop OpenAI from raising $6.6 billion in funding.
On Wednesday, OpenAI completed its latest round of funding. new york timesvalued at US$157 billion. That makes it the largest venture capital round ever, a distinction previously held by Elon Musk’s xAI, which raised $6 billion earlier this year.
The artificial intelligence bubble has burst. This is how we know it.
The investment was led by venture capital firm Thrive Capital, with participation from Microsoft, NVIDIA, Japanese technology investment company SoftBank and UAE investment company MGX. As previous reports confirmed, Apple, which is rumored to have withdrawn from investment talks with OpenAI, is not an investor.
Mix and match speed of light
OpenAI’s huge funding round caps a tumultuous year or so. After the launch of ChatGPT in 2022 triggered a generative AI craze, OpenAI quickly became the latest darling of Silicon Valley, receiving a US$13 billion investment from Microsoft. Its nonprofit board’s failed attempt to oust CEO Sam Altman last November exposed leadership’s distrust of Altman and differing philosophies with his co-founder. Ultimately, co-founder Ilya Sutskever and chief technology officer Mira Murati exited the company last week. Co-founder and president Greg Brockman has taken a leave of absence, and other executives have recently exited the company. OpenAI is also in the process of restructuring its corporate status from nonprofit to for-profit.
Although waning investor interest, a backlash from AI-weary consumers, and promises of AI’s potential that have yet to materialize suggest that the AI bubble may be about to burst (or perhaps slowly leak out after it burst a few months ago), OpenAI’s This funding round has proven that investors have deep pockets and are willing to bet on its success.
OpenAI makes money through subscriptions to its ChatGPT Plus, ChatGPT Enterprise and API accounts. As of August, OpenAI reported that ChatGPT had more than 200 million weekly users, double the number of users in November 2023, and sales are expected to reach $11.6 billion next year (according to CNBC). But building and maintaining artificial intelligence models is not cheap. According to The Information, OpenAI may lose up to $5 billion this year.
