OpenAI has secured $6.6 billion in venture capital investments, led by Thrive Capital and supported by tech giants Microsoft, Nvidia and SoftBank.
This funding marks a significant shift away from OpenAI’s initial nonprofit status.
The big picture: The recent funding is one of the largest fundraising rounds in U.S. history and the largest in the past 17 years that does not involve a single deep-pocketed company, as reported by PitchBook.
- Microsoft made a substantial $10 billion investment in OpenAI last year, becoming a significant stakeholder in the company. This injection of funds supports OpenAI’s focus on frontier AI research, improving compute capacity, and developing tools to solve complex problems.
- OpenAI is transitioning from a nonprofit research institute to a for-profit corporation, aiming for profitability while being accountable to shareholders.
- The company’s governance structure may change if plans are realized to convert into a public-benefit corporation to balance profits and societal benefits.
Go deeper: Apart from Thrive Capital, notable funding supporters include Khosla Ventures, Altimeter Capital, Fidelity Management and Research Company, MGX, ARK Invest and Tiger Global Management.
- The amount of investment from each backer remains undisclosed.
- Apple did not participate in this funding round, despite speculation surrounding its interest in OpenAI following a recent partnership involving the integration of ChatGPT into Apple products.
- As OpenAI aims to expand its model training and develop exclusive products, follow-on funding is essential. This move aligns with staying competitive within the AI sector against rivals such as Elon Musk’s startup xAI, which recently raised $6 billion and is investing in custom data centers like the one in Memphis, Tennessee.
