Microsoft, Nvidia, and SoftBank join in funding OpenAI at a $157 billion valuation.

• OpenAI announced that it raised $6.6 billion in its long-awaited funding round at a $157 billion post-money valuation.
• The round was led by Thrive Capital and had participation from Microsoft and Nvidia, as confirmed by CNBC.
• This year, OpenAI's reported valuation increased from $29 billion to $80 billion.

The long-awaited funding round for OpenAI has closed at a valuation of $157 billion, with the company raising $6.6 billion from a diverse group of investors.

According to a source, the $1 billion investment in OpenAI's latest round was led by Thrive Capital and included participation from existing investors, as well as chipmaker and SoftBank.

The emergence of OpenAI, marked by the launch of ChatGPT in late 2022, has been the most significant development in the tech industry in recent years, popularizing the idea of generative artificial intelligence and laying the groundwork for billions of dollars in investments in AI infrastructure.

"Our leadership in frontier AI research will be further strengthened with the new funding, allowing us to increase compute capacity and continue developing tools that assist people in solving complex problems," OpenAI stated in a blog post on Wednesday.

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.

OpenAI's large language models require a significant amount of training and running, which is extremely costly. The company is expected to lose about $5 billion this year due to the high cost of purchasing Nvidia's graphics processing units (GPUs). Microsoft has invested billions of dollars in OpenAI and is a key partner as the software giant strengthens its Azure cloud business.

OpenAI's value increased to $80 billion this year from $29 billion in 2023, fueled by the popularity of ChatGPT. The company has continued to gain momentum with new business products and an expansion into AI-generated photos and videos.

According to CNBC, Sarah Friar, CFO of OpenAI, stated that the company has 250 million weekly active users on ChatGPT. Additionally, there are 11 million ChatGPT Plus subscribers and 1 million paying business users on ChatGPT, a source close to the company revealed.

"Friar stated that AI is already personalizing learning, accelerating healthcare breakthroughs, and driving productivity, and this is just the beginning."

The departure of key executives has been a persistent issue for OpenAI in its growth process.

On Wednesday, Mira Murati, the Chief Technology Officer of OpenAI who had briefly served as interim CEO, announced her departure after six and a half years. Soon after, research chief Bob McGrew and Barret Zoph, a research vice president, also announced their exit from the company.

In an interview at Italian Tech Week, OpenAI CEO Sam Altman stated, "I believe this transition will be beneficial for everyone involved and I hope OpenAI will become even stronger as a result, like we have with all our previous transitions."

On Thursday, OpenAI held an all-hands meeting after the board decided to consider restructuring the company as a for-profit business, according to a source. Altman stated that the departures were not related to the potential restructuring, contrary to some media reports.

If the change occurs, the nonprofit segment will remain as a separate entity, the source stated.

According to a person who was present at Thursday's meeting, Altman refuted rumors of receiving a "huge equity stake" in the company, stating that the information was "completely false."

Last week, CNBC reported that OpenAI Chairman Bret Taylor stated that although the board has discussed the issue, no specific numbers have been disclosed.

Taylor stated that the board has discussed the possibility of compensating Sam with equity, but no specific figures have been discussed and no decisions have been made.

Sources informed CNBC that the latest funding round included participation from Khosla Ventures, Altimeter Capital, Fidelity, MGX, and Tiger Global.

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