Popularizing Artificial Intelligence with the help of ChatGPT has finally paid off big for OpenAI. In a major plot twist, the firm has seen its valuation top $157 billion after it secured $6.6 billion in funding from investors. This valuation places OpenAI as one of the world’s most valuable private, not-for-profit startups.
The OpenAI Backers
As reported by Reuters, the funding came in the form of convertible senior notes. Though Thrive Capital led the round, investors like Microsoft Corporation and AI giant NVIDIA also participated. When OpenAI set out to have this funding round, its target valuation was initially $100 billion, but with time, it raised it to $150 billion.
This $157 billion valuation is a significant jump for the AI firm considering how it only had a valuation of about $86 billion at the beginning of 2024. The ascent of the firm in a matter of two years, after the launch of ChatGPT, is one of the rare boosts that the tech ecosystem has seen.
In a blog post, the Sam Altman-led firm highlighted its plans to use the new funding to bolster its position in frontier AI research.
In addition, OpenAI intends to increase compute capacity while it continues to build tools to help people. Based on its future plans, the company is looking to drive in $11.6 billion in sales by 2025. if achieved, this will mark a step-up from the $3.7 billion of 2024 projected for 2024.
The Restructuring of Business Model
The funding announcement is coming barely a week after the ChatGPT maker teased a major restructuring move. Under this plan, the firm will transition into a for-profit entity with notable leadership changes taking place. It is rumored that Sam Altman will benefit significantly from this restructuring move.
Altman is likely to receive massive equity in the company which now has a valuation of $157 billion.
The move is in a bid to silence entities like Elon Musk. Musk is a critic who had previously pointed out how OpenAI has deviated from the original non-profit model. Once the restructuring is completed, the AI firm would have what it need to run its business and pursue expansion as it deems fit.
Godfrey Benjamin
Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.
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