OpenAI closes $6.6bn investment round following for-profit plan

OpenAI has received funding of around $6.6 billion in what is being hailed as the largest venture capital deal of all time.

The ChatGPT creator’s latest fundraising round values the company at $157 billion and comes off the back of newly-revealed plans to shift to a for-profit structure in the next two years.

Investors who have backed the generative AI firm include Microsoft, Nvidia, SoftBank, Fidelity, Altimeter Capital, Khosla Ventures, MGX, and Thrive Capital, which led the fundraise, according to a report from Axios.

The investment highlights the speed in which AI is developing, as OpenAI was valued at just $70 billion at the start of 2024. It has added around 1,000 new staff in that time, according to the New York Times.

The NYT also claims the firm is forecasting sales of around $3.7 billion in this financial year, although it is still facing losses, according to financial documents seen by the newspaper.

Around 250 million people now use ChatGPT every week, OpenAI revealed in a statement about its fundraising efforts, saying the money will “allow us to double down on our leadership in frontier AI research, increase compute capacity, and continue building tools that help people solve hard problems.”

“We aim to make advanced intelligence a widely accessible resource. 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,” the company said.

“By collaborating with key partners, including the U.S. and allied governments, we can unlock this technology’s full potential,” the statement continued.

OpenAI confirmed last week that it was planning to restructure itself as a for-profit benefit corporation, which would mean that the non-profit board of directors that has long overseen its operations will no longer be in control.

The plans have yet to be finalised, and OpenAI insisted the non-profit “is core to our mission and will continue to exist.”

Execs departing

The announcement comes after a significant week at OpenAI which included the surprise departure of CTO Mira Murati.

Murati had served as CTO since May 2022, having joined OpenAI two years earlier. Prior to this, she had worked for augmented reality firm Leap Motion and electric carmaker Tesla.

Her departure comes a year after a failed boardroom coup had temporarily put her in charge of the AI company, after senior execs ousted founder and CEO Sam Altman over concerns that it was more focussed on a for-profit model.

It is unclear if her departure is related to this or the finance announcement.

In a statement, Murati said: “I’m stepping away because I want to create the time and space to do my own exploration.

“For now, my primary focus is doing everything in my power to ensure a smooth transition, maintaining the momentum we’ve built.”

She isn’t the only exec leaving OpenAI as two other leaders also announced their departures: chief research officer Bob McGrew and VP of post training Barret Zoph will also leave, though their exits are not related, according to a statement from Altman.

“Leadership changes are a natural part of companies, especially companies that grow so quickly and are so demanding,” said Altman in his note to employees.

“I obviously won’t pretend it’s natural for this one to be so abrupt, but we are not a normal company, and I think the reasons Mira explained to me (there is never a good time, anything not abrupt would have leaked, and she wanted to do this while OpenAI was in an upswing) make sense.”

Altman himself is set to benefit from the “for-profit” plans, with Bloomberg reporting the CEO will be handed a 7% equity stake – that would be worth around $11 billion based on the current valuation – should the corporate restructure successfully be implemented.

Altman has denied the report, telling an all-hands meeting with OpenAI staff in Italy that it would be “ludicrous”, according to a report from The Information. However, the issue being disputed is the amount of equity, rather than the prospect of handing it to Altman, with OpenAI chair Bret Taylor acknowledging discussions had taken place, with “no specific figures” discussed or agreed upon at this time.

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