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Agence France-Presse

OpenAI, the company behind ChatGPT, secured US$6.6 billion in new funding, propelling its valuation to US$157 billion and cementing its position as the world leader in artificial intelligence.
The landmark investment, one of Silicon Valley’s largest, was announced by OpenAI on Wednesday.
Founded in 2015 and led by Sam Altman, OpenAI plans to use the funds to advance its AI research, increase computing capacity, and develop tools for solving complex problems.
Thrive Capital led the funding round, with participation from SoftBank, Microsoft, Nvidia, Tiger Global, and MGX, an investment firm controlled by the United Arab Emirates.

Apple, which uses OpenAI models in its generative AI offerings, withdrew from negotiations on participating in the funding.
This investment makes OpenAI the third-largest venture-backed company globally, behind SpaceX and ByteDance.
The company gained prominence in 2022 with the release of ChatGPT, one of the fastest-downloaded apps ever, showcasing the power of generative AI to produce humanlike content from simple prompts.
OpenAI followed this with GPT-4, the large language model powering ChatGPT and numerous other AI applications.
The new funding is expected to support the development of GPT-4’s successor and accelerate the release of Sora, a tool for creating videos from text commands.
The tech industry views generative AI as a transformative innovation, comparable to PCs or smartphones, with potential to dramatically increase productivity.
Major tech companies like Google, Microsoft, Meta, Amazon, and Apple are heavily investing in generative AI to avoid falling behind.
The frenzy has helped drive Wall Street to record levels, turning Nvidia, which provides crucial components for AI training, into one of the world’s biggest companies.
According to the Financial Times, OpenAI imposed a condition of exclusivity on investors, barring them from investing in rival AI start-ups, such as Anthropic or Elon Musk’s xAI.
OpenAI aims to maintain rapid growth despite significant costs for computing power and talent acquisition.
The company has expanded its workforce to 1,700 employees from 700 in just nine months and is projected to lose US$5 billion in 2024, with estimated sales of US$3.7 billion this year, according to The New York Times.

The cash injection comes at a tumultuous time for OpenAI, with the recent departures by key executives.
Altman’s role inside the company has also grown, less than a year after he was briefly fired by the OpenAI board over his management style and for pushing out new products too quickly.
The coup against Altman only lasted a few days after employees rebelled and Microsoft, the company’s biggest investor, orchestrated his return.
The executives and board members who played roles in his exit have since left the company.
Reports said the investors demanded a reorganisation of the company that would make it an official “for profit” firm more typical of Silicon Valley start-ups and confirm Altman’s authority.
OpenAI, since its founding in 2015, has been organised as a non-profit, with a board that did not answer to investors and a money making arm run separately.
Altman is also reported to be getting equity in OpenAI, which would likely make him a multi-billionaire, though he has denied the reports.
The company also faces a lawsuit from Elon Musk, an original investor, who claims OpenAI has deviated from its initial non-profit mission since he stepped away in 2018.


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Artificial intelligence

Historic funding round values OpenAI at US$157 billion

OpenAI CEO Sam Altman speaks during the Microsoft Build conference in Seattle, Washington, May 21, 2024. Photo: AFP

A keyboard is placed in front of a displayed OpenAI logo in this illustration taken February 21, 2023. Photo: Reuters

The Microsoft logo is seen near computer motherboard in this illustration taken January 8, 2024. Photo: Reuters

SoftBank rises on possible US$500 million investment in OpenAI

Softbank CEO Masayoshi Son speaks during the annual general shareholders’ meeting in Tokyo on June 21, 2024. Photo: AFP

The OpenAI logo is seen near a computer motherboard in this illustration taken January 8, 2024. Photo: Reuters

ByteDance said to be turning to Huawei chips to train AI model amid US curbs, sources say

A Huawei logo is seen at the Mobile World Congress in Shanghai in June 2024. Photo: AFP

The ByteDance office in Shanghai, China. Photo: Reuters

Huawei has been producing alternatives to Nvidia chips, used in training AI models. Photo: Bloomberg

US export restrictions have prevented Nvidia from shipping some of its most advanced AI processors to China. Photo: Reuters

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OpenAI plans to use the funds to advance its AI research, increase computing capacity, and develop tools for solving complex problems


OpenAI plans to use the funds to advance its AI research, increase computing capacity, and develop tools for solving complex problems.
