OpenAI just got itself another investor as SoftBank is making a $500 million investment in the AI company. The investment is part of OpenAI"s funding round, which is led by Thrive Capital, where it is planning to raise $6.5 billion, with a current market valuation of $150 billion.
To raise the additional money, OpenAI has made a few major changes in favor of the investors. The company is currently going through a major restructuring process that will allow it to operate as a for-profit entity, which is set to alter its business model quite significantly. The current valuation also depends on whether OpenAI is able to upend its corporate structure and remove how much profit investors can make, which was previously capped due to the non-profit structure.
The new structure will allow OpenAI to operate without the constraints of a nonprofit board, potentially attracting more investments, but also raising questions about accountability and public interest.
Other investors in the round include Microsoft, which is already a major stakeholder in OpenAI, along with other firms like Tiger Global Management, Coatue Management, and more. There are also ongoing discussions with other potential investors like the United Arab Emirates fund MGX and Dragoneer Investment Group. Apple reportedly dropped out of the plans to participate in the funding.
OpenAI has also been facing a lot of internal challenges, including the recent departure of its chief technology officer, Mira Murati, Barret Zoph, and Bob McGrew.
The most valuable startup in the world is still projected to incur around $5 billion in losses this year, despite generating $3.7 billion in revenue. OpenAI"s monthly revenue is now at $300 million, a 1,700 percent increase since the beginning of 2023, and boasts over 10 million ChatGPT Plus customers.
The company anticipates its revenues to reach $11.6 billion next year.
Source: The Information (paywall)