OpenAI secures $6.6B, aims for profitability with AGI ambitions
OpenAI, the creator of ChatGPT, secured $6.6 billion in the latest financing round. The funds were raised from a variety of sources, including Microsoft and Nvidia. The company's valuation could potentially reach an impressive $157 billion, positioning OpenAI among the most valuable private enterprises globally.
Other significant entities also participated in the financing round, including Altimeter Capital, Fidelity, SoftBank, and MGX, a state investment fund from Abu Dhabi. Thrive Capital's investment reached $1.2 billion, with the option for an additional billion next year. Notably, Apple, despite earlier speculation, decided not to participate in this financing round, according to Bloomberg.
Artificial intelligence in demand
The acquisition of such substantial capital coincides with significant organizational changes at OpenAI. The company is undergoing restructuring and experiencing changes in key positions, highlighted by the recent departure of long-standing Chief Technology Officer Mira Murati. Despite these challenges, investors show unwavering enthusiasm, based on the forecasts presented by Sam Altman, CEO of OpenAI.
The company's financial projections are impressive. OpenAI anticipates reaching revenues of $3.6 billion this year, with losses exceeding $5 billion. A significant increase in revenues to $11.6 billion is projected for 2024. These ambitious financial goals reflect the company's dynamic growth, with its valuation increasing from $14 billion in 2021 to the current $157 billion in just a few years.
OpenAI is continuing its work on artificial general intelligence (AGI), striving to create AI systems that surpass human intelligence. At the same time, the company is intensifying its commercialization efforts, aiming to achieve profitability. The popularity of OpenAI's products is remarkable—ChatGPT currently attracts 250 million active users weekly.
Transaction details
The structure of the acquired financing relies on convertible bonds. The conversion to equity depends on the successful transformation of OpenAI into a profit-oriented entity, which involves relinquishing control held by the non-profit organization's board and removing the return cap for investors. Negotiations on this matter are ongoing, but specific timelines have not yet been established.
Investors have secured their interests by negotiating clauses that allow them to recover their invested capital or renegotiate the valuation if the planned structural changes are not implemented within two years. Additionally, OpenAI plans to enable employees to cash out their shares in the company through a stock buyback offer. However, details and timelines of this operation have not yet been established.
