OpenAI has added another massive financing round to the generative AI boom. The ChatGPT maker said it raised $6.6 billion in a funding round that values the company at $157 billion post-money, giving it new capital for research, compute capacity and product development.
The round was led by previous investor Thrive Capital and brings OpenAI’s total raised to $17.9 billion, per Crunchbase. It also arrives as OpenAI faces rising costs, aggressive rivals and questions about how its corporate structure may evolve.
The investors behind the new OpenAI funding
Thrive Capital led the round and invested around $1.3 billion, per The New York Times. The firm also has an exclusive option to invest up to $1 billion more at the same valuation through 2025.
Other participants included Microsoft, Nvidia, SoftBank, Khosla Ventures, Altimeter Capital, Fidelity and MGX. Microsoft reportedly invested a little less than $1 billion, while Nvidia pledged $100 million and SoftBank put in $500 million, according to The Wall Street Journal.
The size of the round places OpenAI in a category of its own among AI startups. The source article describes it as the largest VC round of all time and notes that OpenAI was already the world’s best-funded AI startup before the new financing closed.
Why OpenAI needs so much capital
The simple answer is that frontier AI is expensive to build, train and operate. OpenAI said the new funding will help it double down on frontier AI research, increase compute capacity and continue building tools for hard problems.
The company is reportedly spending billions as it trains and turns AI systems into products, including systems like o1. It is also recruiting data science talent in a competitive market where several companies are trying to build powerful next-generation models.
According to The Information, OpenAI has spent roughly $7 billion on model training and $1.5 billion on staffing. Sam Altman has said one of the company’s older leading models, GPT-4, cost more than $100 million to train. At one point, ChatGPT alone was said to be costing OpenAI $700,000 a day to run.
Those figures explain why a company with major revenue momentum can still seek a very large cash infusion. Running a widely used generative AI platform is not only a software business; it also depends on compute, infrastructure, talent and data relationships.
ChatGPT gives OpenAI scale, but rivals are closing in
OpenAI remains the market leader in generative AI. ChatGPT has more than 250 million users, around 10 million of which are paying subscribers. OpenAI’s annualized revenue has reportedly eclipsed $3.4 billion, and ChatGPT alone could bring in $2.7 billion this year, The New York Times reports, citing internal OpenAI docs.
Its partnerships also extend the company’s reach. Microsoft, which is close to $14 billion in as OpenAI’s partner and investor, has built an entire suite of productivity products on top of OpenAI models. Apple is also integrating ChatGPT with its Apple Intelligence lineup of AI technology.
Still, OpenAI is not alone in the race. The source article points to several competitive fronts:
- Runway and Luma Labs reached the market with high-fidelity video generation models before OpenAI.
- OpenAI’s video model, Sora, is expected to launch sometime this fall.
- Anthropic continues to build an AI product suite to rival ChatGPT.
- xAI, Google and Amazon are investing heavily in infrastructure for next-generation models.
- Meta and upstarts such as Black Forest Labs continue releasing open models for text- and image-generating AI.
OpenAI’s own revenue ambitions are also large. The company optimistically projects revenue will reach $100 billion in 2029, matching the current annual sales of Nestlé. But the same growth target underlines the pressure to keep raising money, improving products and defending its lead.
Governance questions now sit beside the money
The funding comes with signs of unusual conditions and structural pressure. The Financial Times reported that OpenAI asked investors to avoid backing rival startups such as Anthropic and xAI.
The company’s structure is also in focus. OpenAI’s for-profit division is currently governed by a nonprofit that caps investors’ returns. Altman is said to have signaled that OpenAI will move away from nonprofit governance in the next few months.
Reuters reported earlier that closing the $6.6 billion round was contingent on this move, and Altman possibly receiving equity. According to Bloomberg, investors in the new round will be able to claw back their cash if OpenAI does not complete the conversion from nonprofit to for-profit within two years.
More flexibility to raise money could matter for future bets. The source article notes that OpenAI may explore capital-intensive projects such as AI chips and entire datacenters to reduce reliance on Nvidia, whose hardware is used to train and run many of OpenAI’s models. Fresh capital could also support licensing agreements with data providers such as Reddit and Condé Nast.
Leadership turnover adds another test
Even with the new funding, execution is not guaranteed. OpenAI has recently seen a string of high-profile departures tied to disagreements over the company’s direction.
CTO Mira Murati, chief research officer Bob McGrew and research VP Barret Zoph announced their resignations in late September. Prominent research scientist Andrej Karpathy left OpenAI in February. Months later, OpenAI co-founder and former chief scientist Ilya Sutskever quit, along with ex-safety leader Jan Leike.
In August, co-founder John Schulman said he would leave OpenAI. Greg Brockman, the company’s president, is on sabbatical. Of the 13 people who helped found OpenAI in 2015, only three remain.
The new $6.6 billion round gives OpenAI more financial room than any other AI startup described in the source article. The harder question is how the company uses that room: to keep ChatGPT growing, fund frontier AI research, compete across models and infrastructure, and navigate a possible shift away from nonprofit governance.