OpenAI has successfully completed a funding round and secured $6.6 billion, which elevates its valuation to $157 billion post-money. Its funding initiative was led by Thrive Capital, a previous investor, and brings OpenAI’s total capital raised to approximately $17.9 billion.
Thrive Capital contributed around $1.3 billion, and has an exclusive option to invest an additional $1 billion at the same valuation through 2025. Other notable participants in this funding round include Microsoft, Nvidia, SoftBank, Khosla Ventures, Altimeter Capital, Fidelity, and MGX. Microsoft reportedly invested just under $1 billion, while Nvidia committed $100 million and SoftBank contributed $500 million.
“The new funding 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.” stated OpenAI in a blog post.
OpenAI has already established itself as the most well-funded AI startup globally. This latest funding round enhances its position in the market. For comparison, Elon Musk’s xAI raised over $6 billion earlier this year but was valued at only $24 billion post-money.
In contrast, Anthropic has raised just over half of OpenAI’s total at $9.7 billion since its inception, while other high-profile AI ventures like Cohere and Mistral have capital reserves around $1 billion.
The necessity for such substantial funding can be attributed to OpenAI’s expansive operations. The company is reportedly expending billions on training and productising its AI systems—like the recently launched o1—and attracting top-tier data science talent to remain competitive.
OpenAI leads the generative AI market with ChatGPT boasting over 250 million users, approximately 10 million of whom are paying subscribers, and annualised revenue reportedly exceeding $3.4 billion. Internal documents suggest that ChatGPT could generate around $2.7 billion in revenue this year.
Microsoft has heavily invested around $14 billion in OpenAI, and has built a suite of productivity tools utilising OpenAI’s models. Additionally, Apple is integrating ChatGPT into its Apple Intelligence lineup of AI technologies.
Looking ahead, OpenAI projects revenues could reach $100 billion by 2029, though it faces stiff competition from various fronts.
Startups like Runway and Luma Labs have already released high-fidelity video generation models ahead of OpenAI’s own video model Sora, expected to launch soon. Meanwhile, Anthropic continues developing an AI product suite aimed at competing with ChatGPT.
Major players like xAI, Google, and Amazon are also investing heavily in infrastructure for next-generation models. Meta and emerging companies like Black Forest Labs are releasing open models in an effort to commoditise text- and image-generating AI.
Given these competitive pressures, OpenAI may consider raising the price of its premium ChatGPT Plus plan from the current $20 per month to as much as $44 by 2029 while restructuring its corporate framework to attract more investments.