IBL News | New York
OpenAI announced on Monday that it closed a $40 billion funding round, the largest private amount raised by a private tech company.
The $40 billion financing valued the ChatGPT owner at $300 billion. This valuation puts OpenAI only behind SpaceX at $350 billion and TikTok.
The financing round included $30 billion from SoftBank and $10 billion from a syndicate of investors, including core investor Microsoft and Coatue, Altimeter, and Thrive.
According to a blog post, OpenAI plans to use the fresh capital to “push the frontiers of AI research even further” and scale its compute infrastructure.
About $18 billion of the funding is expected to be used for OpenAI’s commitment to Stargate, the joint venture between SoftBank, OpenAI, and Oracle, which President Trump announced in January.
The initial funding will be $10 billion, followed by the remaining $30 billion by the end of 2025. However, in an updated disclosure on Monday, SoftBank said that its total investment could be slashed to as low as $20 billion if OpenAI doesn’t restructure into a for-profit entity by Dec. 31.
The pulling into a for-profit conversion will need the approval of Microsoft and the California Attorney General. Elon Musk, who was one of the co-founders of OpenAI in 2015, when it was started as a non-profit research lab, challenged in court this effort of OpenAI.
On the other hand, OpenAI CEO Sam Altman announced yesterday that the company is planning to release its first open-weight language model with reasoning capabilities since GPT-2 in the coming months.
The generative AI market is poised to top $1 trillion in revenue within a decade. Companies from Google and Amazon to Anthropic and Perplexity are racing to announce new products and features, especially as the race to build “AI agents” intensifies.
