OpenAI Raises Record $6.6 Billion in Funding

OpenAI has closed a historic funding round, securing $6.6 billion in investment at a valuation of $157 billion. The round was led by Thrive Capital, which invested $1 billion. Thrive has a special deal that will allow it to invest another $1 billion next year at the same valuation if the company achieves its revenue targets.

These funds appear to depend on whether OpenAI restructures into a commercial company. The company's commercial arm is currently overseen by a non-profit research organization, and investor profits are currently capped at 100x. If OpenAI does not restructure into a commercial company within two years, investors may demand their money back.

Last week, Reuters reported that the company is considering becoming a public benefit corporation (like Anthropic). This would mean that OpenAI would prioritize public interests over investor profits.

OpenAI has also asked investors to refrain from supporting competing startups, such as Anthropic and xAI by Elon Musk. This move is rare for the company and suggests OpenAI's desire to maintain its leadership in the artificial intelligence market.

This funding round values OpenAI at approximately 40 times its reported revenue. This is unprecedented, highlighting the hype surrounding AI in the Silicon Valley. The New York Times reported that OpenAI's monthly revenue reached $300 million in August, and the company expects around $3.7 billion in annual sales this year (and estimates its revenue will reach $11.6 billion next year).

These billions will go towards the expensive task of training advanced AI models. Anthropic's CEO Dario Amodei stated that AI models being trained for $1 billion are in development, and models costing $100 billion are not far behind. For OpenAI, which wants to create a series of "reasoning" models, these costs are expected to only increase, making new funding rounds like this critically important.

This funding round is a significant step forward for OpenAI and demonstrates investor confidence in the company's potential. However, the company's future still depends on its ability to restructure and achieve its revenue targets.