Artificial Intelligence & Machine Learning , Next-Generation Technologies & Secure Development , The Future of AI & Cybersecurity

OpenAI Valuation Nearly Doubles to $157B After $6.6B Funding

OpenAI secured $6.6 billion of funding on a $157 million valuation to scale operations and maintain its position at the forefront of artificial intelligence research.

See Also: AI and ML: Ushering in a new era of network and security

The largest venture capital round in history will help the San Francisco-based AGI behemoth expand its computational capacity, lead AI research and build tools that solve complex problems. The company said the massive haul will allow OpenAI to scale its AI innovations to a broader audience and support the development of tools designed to tackle complex problems and make advanced AI widely accessible.

"We aim to make advanced intelligence a widely accessible resource," OpenAI wrote in a blog post Wednesday. "We’re grateful to our investors for their trust in us, and we look forward to working with our partners, developers and the broader community to shape an AI-powered ecosystem and future that benefits everyone."

OpenAI did not disclose the name of the investors, but The Wall Street Journal reported Thrive Capital led the investment with contributions from key players including Microsoft, SoftBank and Nvidia, as well as Khosla Ventures, Fidelity, Altimeter Capital and UAE's MGX. Apple was reportedly in talks to invest in OpenAI but did not move forward, according to The Journal.

OpenAI's post-money valuation is up more than 80% from $86 billion earlier this year, making it one of the highest-valued companies globally. Thrive Capital put in $1.25 billion during the latest funding round, Microsoft contributed less than $1 billion, SoftBank invested $500 million and Nvidia put in $100 million, according to The Journal.

The company's growth continues at a rapid pace, with over 250 million people globally using ChatGPT weekly for tasks such as creativity, work and learning, according to OpenAI. The company faces growing competition from major players such as Google and Meta as well as emerging startups such as Anthropic, all of which makes securing large-scale funding more critical for OpenAI to maintain its market leadership.

OpenAI continues to struggle with profitability and is expected to lose around $5 billion this year on revenue of $3.7 billion, The Journal reported. It is projecting revenue will grow to $11.6 billion in 2025.

Funds Mount as Challenges Intensify

Despite its funding success, OpenAI faces internal challenges, with several senior executives resigning as the company transitions from its nonprofit origins toward a more profit-driven model. The exit of several top executives, including Chief Technology Officer Mira Murati, Chief Research Officer Bob McGrew and Research Vice President Barret Zoph, sparked concerns over OpenAI's long-term direction (see: OpenAI Exits, Appointments and New Corporate Model).

OpenAI CEO Sam Altman said that leadership changes are a natural part of companies, especially ones that "grow so quickly and are so demanding." "I obviously won't pretend it's natural for this one to be so abrupt, but we are not a normal company," Altman said last week. "Mira, Bob and Barret made these decisions independently of each other and amicably."

Amid the executive turnover, OpenAI in June hired Sarah Friar as the company's first-ever chief financial officer to manage its rapid growth and business expansion. The company reportedly has 11 million paying subscribers as well as 1 million business customers that are paying to use OpenAI's technology.

OpenAI is also navigating the tension between its original nonprofit mission and the need to generate profits to fund further research, with Altman arguing the commercialization of AI products is necessary to fund ongoing research and ensure public access to advanced IT technologies. But some employees are worried that OpenAI is prioritizing commercial success over safety and ethical considerations.

The company is shifting toward becoming a for-profit company while maintaining a nonprofit arm, with OpenAI saying the structural change will allow investors to own a stake in the company's future profits. OpenAI allegedly expedited the release of its AI models despite concerns over safety testing, raising questions about the company's commitment to balance innovation with security risks.