Athira Sethu
Kochi, 3 October 2024
OpenAI, the company behind ChatGPT, said that it has raised $6.6 billion from investors at a valuation of $157 billion. With its latest valuation, OpenAI now joins Microsoft and Tesla among the world’s most valuable companies.
The funding comprised existing investors such as Thrive Capital and Khosla Ventures and also attracted some new ones, including Nvidia. Microsoft, OpenAI’s biggest corporate supporter to date, also came on board on this round fund raising.
Other notable investors of this round are Altimeter Capital, Fidelity, SoftBank, and MGX, which is a state-backed investment firm from Abu Dhabi. The money will be raised through convertible notes-that means it can be converted into equity sometime in the future. This funding is essentially tied to a significant change in the company’s structure as it plans to switch from being a nonprofit to a for-profit unit, giving more power to investors.
This round of funding is coming at a juncture when the company is actually undergoing critical change, including a recent leadership shake-up. Last week, its Chief Technology Officer, Mira Murati announced she is leaving, which deepens the sense of uncertainty around the firm.
Investor interest is still high, despite the recent change in leadership. Optimistic projections from the CEO, Sam Altman, and CFO, Sarah Friar, indicate that OpenAI has immense growth potential. The company is likely to post a revenue of $3.6 billion this year, despite incurring a loss in excess of $5 billion. Its projects’ revenues rising to $11.6 billion next year, indicates better times ahead.
OpenAI is certainly the talk of the town regarding growth. Since ChatGPT was launched, the business has witnessed around 250 million weekly active users. And the valuation of the company surged to $157 billion as its revenue came from zero to $3.6 billion, which is way beyond the earlier projections.
