- OpenAI’s $6.6 billion funding round attracted some big names across the industry.
- Investors had to shell out large sums and are said to be avoiding future investments in OpenAI’s rivals.
- OpenAI is now valued at $157 billion factoring in recent funding, making it one of the most valuable startups in the world.
Sam Altman has taken his share of bumps and bruises over the past year, but he proved again that he can convince investors to pour hundreds of millions into OpenAI.
The latest funding round appeared to be the hottest ticket in Silicon Valley, attracting more investors looking to participate in the buzzing AI startup’s latest capital raise.
The $6.6 billion round gave OpenAI a post-money valuation of $157 billion and turned it into one of the world’s most valuable startups. The startup’s valuation is now in the same neighborhood of publicly traded companies like Uber or AT&T.
In a statement posted on its website, OpenAI said the funding would “accelerate progress on our mission” and that it was “grateful to our investors for their trust in us.”
The investors’ participation — which reportedly carried a stipulation that they should not invest in rival AI companies — comes as OpenAI is discussing how to transform itself from a nonprofit to a more traditional for-profit company, and several high-profile executives have left for him. join rivals or start their venture.
Here’s who blew up the checkbooks.
Thriving capital
Anderson Cooper, Sam Altman and Thrive Capital founder Josh Kushner at the Allen & Company Sun Valley Conference on July 11, 2024. Getty/Kevork Djansezian
Thrive Capital led the funding round, a spokesperson confirmed to Business Insider. The VC firm, founded by Josh Kushner, has made early investments in some already prominent companies like Slack and Instagram and previously invested in OpenAI.
The venture firm invested about $1.25 billion, according to a report by The Wall Street Journal. Thrive also has the option to invest another $1 billion in OpenAI next year at the current valuation if a revenue target is met, Reuters reported last month.
In addition to being an investor in OpenAI, Kushner is close to Altman, The Information reported last month. “I have been fortunate to work with many great investors; there is no one I would recommend more highly than Josh,” Altman wrote in a post on X, formerly known as Twitter, in August.
SoftBank
The long-awaited funding round also attracted newcomers like SoftBank. A source close to the Japanese media technology conglomerate told Business Insider that it had invested $500 million.
The deal gives the Tokyo-based firm, led by enigmatic founder Masayoshi Son, its first major stake in a company that develops the large language models (LLMs) that have powered buzzy apps like ChatGPT in the AI-generating boom .
While SoftBank led several investments in AI-related Silicon Valley firms ahead of the generative AI boom through its $100 billion Saudi-backed Vision Fund, it has been slow to invest in a post-ChatGPT world as it has sought to repair her reputation after her disaster. Bet WeWork.
However, Son has signaled in recent months that he would be ready to make an investment again to capture opportunities in the generative AI frenzy.
At the company’s annual meeting in June, the SoftBank founder told shareholders that past investments were just a “warm-up” for AI and advancing the technology is “what I was born to do.”
Enterprise Fund ARK
Cathie Wood of ARK Invest. Photo by Marco Bello/Getty Images
Cathie Wood’s ARK Venture Fund agreed to invest at least $250 million in this funding round, its second investment in the company, Business Insider first reported. Ark has also invested in several other big-name startups such as Anthropic, xAI, SpaceX, FigureAI and Databricks.
Wood compared the state of artificial intelligence to that of the Internet in the early 1990s in an April interview with Morningstar.
“We were just getting started and had miles to go,” Wood said. “Actually, we’re still learning how powerful the Internet is. That’s where we are today with artificial intelligence.”
ARK did not immediately respond to BI’s request for comment.
Microsoft
Microsoft invested just under $1 billion in OpenAI’s latest funding round, according to The Wall Street Journal report. The tech giant has a partnership with OpenAI and has already invested $13 billion in the company. Rival Apple reportedly considered its own investment in OpenAI, though nothing came of the talks.
Microsoft has also added OpenAI technology to Bing, its search engine and its Copilot AI tools, as well as some of its other products.
Microsoft did not immediately respond to a request for comment from BI.
Nvidia
Nvidia CEO Jensen Huang. Sam Yeh/AFP via Getty Images
Nvidia is no stranger to the AI spotlight, with its chips the best-in-class option for companies like OpenAI that are building frontier models of AI.
Nvidia invested about $100 million in OpenAI’s funding round, according to the Journal report.
Nvidia declined to comment, referring BI to OpenAI.
Tiger Global
Tiger Global Management also invested in OpenAI’s latest funding round, Business Insider reported. The amount of the contribution could not be learned.
The company has invested aggressively in technology in recent years, making 335 investments in 2021, according to Crunchbase. The firm has since pulled back on its number of investments annually as the market soured, but it bought $125 million in OpenAI stock in 2021.
faithfulness
Fidelity also participated in OpenAI’s latest funding round. The asset manager recently participated in a funding round for Elon Musk’s xAI.
Fidelity often invests in late-stage startups that may go public in an IPO several years later. The strategy could help big mutual fund firms get ahead of potentially hot IPOs at a lower price.
Altimeter Capital Management
According to reports, Altimeter Capital Management also contributed to OpenAI’s latest funding round. Altimeter did not immediately respond to a request for comment from BI.
Brad Gerstner, the investment firm’s CEO and founder, said at an AI conference on Wednesday after announcing the seed round that OpenAI’s next move should be an IPO.
“Having the opportunity for every retail investor in America to share in the upside that’s being created by AI at a time when we’re going to have massive social disruption, job losses and other things, I think is incredibly important,” Gerstner said. . according to GeekWire.
Khosla Ventures
Vinod Khosla recently published a 10,000+ word essay on the future of AI. Vaughn Ridley/Getty
Khosla Ventures also participated in the funding round.
Vinod Khosla, who co-founded Sun Microsystems, recently wrote in a lengthy op-ed POST on his VC firm’s website that AI would cut costs and take over most of the work humans do — and do it better, for the most part. He also predicted that there would be a billion robots in the next 25 years.
Khosla has previously invested in OpenAI.
MGX
MGX, an investment firm backed by the United Arab Emirates, participated in OpenAI’s latest round, Reuters reported. The firm did not immediately respond to a request for comment after business hours.
The firm was created earlier this year to invest in artificial intelligence and semiconductors, Bloomberg reported in March. At the time, MGX reportedly aimed to have $100 billion under management in the next few years.