OpenAI has completed its latest funding round, raising $6.6 billion at a post-investment valuation of $157 billion, making it the world’s most valuable AI company.
The funding is expected to bolster OpenAI’s ability to advance AI research, expand its computational infrastructure, and continue developing solutions to solve complex challenges.
“The new funding will help us strengthen our leadership in cutting-edge AI research, expand our computational capabilities, and continue building tools that help people solve difficult problems,” OpenAI said in a statement.
CNBC and Bloomberg News reported that Thrive Capital led the round, with participation from major investors including Microsoft, Nvidia, SoftBank, Khosla Ventures, and others. Apple reportedly walked away from the deal.
Soaring Valuation
OpenAI’s valuation has skyrocketed in recent years, from $29 billion in 2023 to $80 billion in early 2024. This reflects the company’s dominance in the AI space and strong industry demand to fund research into the expensive technology.
OpenAI’s growth has been largely driven by the widespread adoption of ChatGPT, which now has 250 million weekly active users, including 11 million ChatGPT Plus subscribers and 1 million paying businesses.
OpenAI’s revenue has also grown strongly, projected to reach $11.6 billion in 2025, up from an expected $3.7 billion in 2024. However, the company is expected to record a $5 billion loss this year due to high research costs.
Challenges
Despite its rapid growth and soaring valuation, OpenAI faces significant financial challenges that threaten its long-term sustainability. One of the main obstacles is the enormous operating costs associated with running large language models, which rely heavily on Nvidia’s high-end graphics processing units (GPUs).
These GPUs are essential for training and running AI models but are expensive, contributing to OpenAI’s projected $5 billion loss this year. Despite the company’s strong revenue growth—it is expected to reach $11.6 billion by 2025, up from $3.7 billion in 2024—OpenAI continues to operate at a significant loss.
This imbalance between revenue and costs creates challenges as OpenAI invests heavily in expanding its AI research and infrastructure. Additionally, its heavy reliance on investment from major investors like Microsoft and Nvidia raises concerns about its long-term financial stability.
OpenAI has also undergone internal changes recently. The company announced the departure of several key leaders, including Chief Technology Officer (CTO) Mira Murati and Head of Research Bob McGrew. The departures pave the way for a change in OpenAI’s policies, transforming the company from a non-profit, ethical business model to a profit-driven one.
ChatGPT Releases New Features
On October 1, OpenAI announced an update to ChatGPT that enhances the visual and speech capabilities of its large language model.
The Realtime API upgrade makes it easier for developers to create voice applications that simulate natural speech patterns.
Improvements to ChatGPT’s image processing capabilities have also been implemented in the latest updates. This allows operators to provide feedback to the language model to strengthen its capabilities and train the model to improve its responses over time.