Artificial intelligence (AI) company OpenAi has finalized a deal to raise $6.6 billion in funding from investors.
The deal values the company at a whopping $157 billion, making it one of the most valuable private companies in the world.
The funding round also saw participation from OpenAI’s biggest backer Microsoft, and chips giant Nvidia, apart from other venture capital investors.
With the closure of funding round, OpenAI also seems to have finalized its restructuring plans. This could lead to founder Sam Altman becoming a stakeholder in the company.
According to a report by Bloomberg, investors who took part in this round of funding will have an option to recover their money or reevaluate the holdings in the company if the restructuring of OpenAI to a for-profit model is not completed within two years.
Recent exits fail to have an impact on OpenAI funding
The recent exits of three top technical executives from OpenAI seemingly failed to have an impact on the funding process. The exits of OpenAI’s Chief Technology Officer Mira Murati, VP Research Barret Zoph, and Chief Research Officer Bob McGrew were announced in quick succession just last week.
The same was later verified through a post on X by Altman, in which he had stated that the positions will be soon filled in, and it would not affect the company’s work.
Prior to this, the company’s co-founder and chief scientist Ilya Sutskever had also parted ways.
Sutskever had announced a startup and stated that it will target building a safe superintelligence. Sutskever’s startup also had his former OpenAI colleague Daniel Levy, and Apple’s former AI lead Daniel Gross in major roles.
At around the same time that Murati’s exit had been announced, reports had surfaced about OpenAI negotiating a funding round.
The funding round is dependent on the company’s ability to revamp its corporate structure.
It should also be noted that the company was reportedly planning to give Altman a 7% stake as part of the proposed restructuring. Details about the same are yet to be out in the public.
Successful funding round for the ChatGPT-maker
According to a report by Reuters, OpenAI is set to generate $3.6 billion in revenue in 2024, as compared to losses of over $5 billion. However, for the next year it is projecting a revenue jump to $11.6 billion.
The report also mentions that the investors in this funding round have reserved the right to renegotiate the deal they have entered in if the company fails to meet the agreed upon terms and the projected revenue. The restructuring includes granting Altman equity stakes in OpenAI.
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The recent jump in company’s valuation has come as a surprise to many, OpenAI was valued at $14 billion in 2021, and since then it has risen constantly.
The funding received in this round is going to help it advance the release of Sora, a text-to-video generator and also the GPT-4 successor.
However, another interesting incident which happened in this funding round is that Apple decided to stay away from it, despite being in talks with OpenAI to integrate its offerings in its smartphones, and more.
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Abhishek Bhardwaj Abhishek brings a wealth of experience in covering diverse stories across different beats. Having contributed to renowned wire agencies and Indian media outlets like ANI and NDTV, he is keenly interested in Tech, Business and Defense coverage.
