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OpenAI Raises $6.6 Billion at $157 Billion Valuation; Microsoft, Nvidia Join Round

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CNBC·cnbc.com/2024/10/02/openai-raises-at-157-billion-valuatio...

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Reports OpenAI's $6.6B funding round at $157B valuation, signaling massive capital flows into frontier AI development. Relevant to AI safety as it reflects the pace and scale of AI capabilities investment, governance transitions, and the commercial pressures shaping OpenAI's trajectory.

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Importance: 42/100news articlenews

Summary

OpenAI closed a $6.6 billion funding round at a $157 billion post-money valuation, led by Thrive Capital with participation from Microsoft, Nvidia, and SoftBank. The company reported $300 million in monthly revenue but expects to lose ~$5 billion in 2024 due to massive compute costs. The round coincided with the departure of several senior executives including CTO Mira Murati.

Key Points

  • •OpenAI raised $6.6B at a $157B valuation, led by Thrive Capital with Microsoft, Nvidia, and SoftBank participating.
  • •Revenue grew 1,700% since early 2023 to $300M/month, with $11.6B projected for 2025, but losses of ~$5B expected in 2024.
  • •ChatGPT now has 250M weekly active users, 11M Plus subscribers, and 1M paying business users.
  • •CTO Mira Murati and research leaders Bob McGrew and Barret Zoph departed around the time of the funding announcement.
  • •OpenAI is considering restructuring, likely toward a for-profit model, amid rapid commercial scaling.

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OpenAI raises at $157 billion valuation; Microsoft, Nvidia join round Skip Navigation Markets Business Investing Tech Politics Video Watchlist Investing Club PRO Livestream Menu 

 Key Points OpenAI closed its long-awaited funding round, announcing that it raised $6.6 billion at a $157 billion post-money valuation.
 Led by Thrive Capital, the round also had participation from Microsoft and Nvidia, CNBC confirmed.
 Earlier this year, OpenAI was valued at a reported $80 billion, up from $29 billion in 2023.
 watch now VIDEO 6:55 06:55 OpenAI closes mega-funding round at $157 billion valuation: Here's what to know Squawk Box OpenAI has closed its long-awaited funding round at a valuation of $157 billion, including the $6.6 billion the company raised from an extensive roster of investment firms and big tech companies.

 While OpenAI didn't name the investors in Wednesday's press release, a person with knowledge of the matter said the round was led by Thrive Capital and included participation from existing backer Microsoft as well as chipmaker Nvidia , SoftBank and others. Thrive planned to invest $1 billion in the round, CNBC previously reported.

 OpenAI's rapid ascent, which began with the launch of ChatGPT in late 2022, has been the biggest story in the tech industry over the last couple years, bringing the concept of generative artificial intelligence into the mainstream and paving the way for tens of billions of dollars of investments in AI infrastructure.

 "The new funding will allow us to double down on our leadership in frontier AI research, increase compute capacity, and continue building tools that help people solve hard problems," OpenAI wrote in a blog post Wednesday.

 "We look forward to continuing our partnership with OpenAI," a Microsoft spokesperson told CNBC in a statement.

 OpenAI generated $300 million in revenue last month, up 1,700% since the beginning of last year, CNBC confirmed last week, following reporting by The New York Times. The company expects to bring in $11.6 billion in sales next year, up from $3.7 billion in 2024, according to a person close to OpenAI who asked not to be named because the financials are confidential.

 But all that revenue is extremely costly, as OpenAI has to ramp up purchases of Nvidia's graphics processing units (GPUs) to train and run its large language models. The company expects to lose about $5 billion this year, the person said. Microsoft has invested billions of dollars in OpenAI and is a key partner as the software giant bolsters its Azure cloud business.

 Earlier this year, OpenAI was valued at a reported $80 billion, up from $29 billion in 2023. Following the viral growth of ChatGPT, momentum has continued with new products for businesses and an expansion into AI-generated photos and videos.

 OpenAI now has 250 million weekly active users on ChatGPT, CFO Sarah Friar told CNBC in a statement. There are also 11 million ChatGPT Plus subscribers and 1 million pa

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