OpenAI has secured $8.3 billion at a valuation of $300 billion, several months ahead of schedule in its goal to raise $40 billion by 2025, according to The New York Times.
The funding round included new investors such as Blackstone, TPG, and T. Rowe Price. Other participants were Fidelity Management, Founders Fund, Sequoia Capital, Andreessen Horowitz, Coatue Management, Altimeter Capital, D1 Capital Partners, Tiger Global, and Thrive Capital.
Blackstone and TPG had not previously invested in AI model developers. OpenAI considered them particularly valuable, as they can actively integrate ChatGPT into their portfolio companies in healthcare, finance, and industry.
The new round saw stock purchase subscriptions exceed expectations by five times, causing dissatisfaction among early investors who received smaller shares. OpenAI prioritized new strategic partners.
Dragoneer Investment Group led the round, investing $2.8 billion—one of the largest individual checks in venture capital history.
Previously, the fund made successful investments in Airbnb, Spotify, and Uber. The new investment represents about 10% of the fund’s total assets.
OpenAI’s annual revenue reached $13 billion, up from $10 billion in June. By year-end, the figure could exceed $20 billion, writes The New York Times.
The number of business users has grown to 5 million, compared to 3 million a few months ago.
In late March, OpenAI announced it had raised $40 billion at a $300 billion valuation. Initial investments amounted to $10 billion, with the remaining $30 billion expected by year-end.
Collaboration with Microsoft
The round closed amid negotiations between OpenAI and its strategic investor Microsoft regarding long-term access to Sam Altman’s company’s key technologies.
The parties are discussing new terms that would allow Microsoft to use OpenAI’s latest models and solutions even if the ChatGPT developer declares the achievement of AGI.
The current contract between Microsoft and OpenAI includes a clause that would see Bill Gates’ firm lose some rights to the startup’s advanced technologies after such an event.
Negotiations are ongoing, and an agreement could be reached within weeks, the agency reports.
OpenAI needs Microsoft’s approval to complete its transformation into a public-benefit corporation. The companies have been negotiating for several months to revise investment terms, including the future stake of the Windows creator in OpenAI’s capital.
On July 31, Microsoft became the second company in the world to reach a market valuation of $4 trillion. One factor in the stock’s rise was its bet on OpenAI, having invested about $13 billion, with the first $1 billion in 2019.
In May, OpenAI deviated from its plan to fully transform into a commercial company, deciding to maintain control through a non-profit organization.