OpenAI has raised $40 billion in a new investment round led by SoftBank, vaulting the company to a $300 billion valuation. It’s the largest funding round for a private tech company in history, according to CNBC.
OpenAI is set to receive $10 billion up front (SoftBank will invest $7.5 billion along with $2.5 billion “from an investor syndicate,“ according to Bloomberg). The remaining $30 billion is slated to arrive by year’s end, CNBC reported — but only if it officially converts into a for-profit company by then. If not, it reportedly stands to lose a quarter of the deal.
The funding comes just a few months after OpenAI announced Stargate, a $500 billion joint venture with backing from SoftBank, Oracle, and the Abu Dhabi fund MGX to build out massive AI datacenters over the next four years. The company has been in a full sprint lately: On Monday, CEO Sam Altman posted that OpenAI gained 1 million users in a single hour in large part thanks to a new feature called Images in ChatGPT that went viral due to its ability to produce Studio Ghibli inspired AI art. Altman also announced on Wednesday that the company would “release a powerful new open-weight language model with reasoning in the coming months.” The funding announcement claims that ChatGPT serves 500 million people every week.
Despite the explosive growth the startup has seen thanks to ChatGPT, it’s still burning a ton of cash. Bloomberg recently reported that the startup is expecting to earn $12.7 billion in revenue this year alone, which is a massive jump from the $3.7 billion it earned in annualized recurring revenue last year. Still, the report claims OpenAI doesn’t expect to be cash flow positive until 2029, when its projections predict a whopping $125 billion in revenue.
OpenAI’s funding announcement emphasized the startup’s goal of building “AGI that benefits all of humanity.” Altman has been clear that it’ll take a lot to pull this all off—compute, energy, global infrastructure, and yes, a staggering amount of cash. This round, the startup claims, brings it one step closer.
