Pranav Mathur, Pune
On Wednesday, OpenAI, the parent company of ChatGPT, put out a statement saying that they have generated $6.6 billion in venture capital investments, taking a shift away from its nonprofit roots. Tech behemoths Microsoft, Nvidia, and SoftBank supported the investment round, which was headed by venture capital company Thrive Capital, according to a person with knowledge of the funding who was not authorised to discuss it in public.
This investment round became one of the biggest fundraising rounds in the history of the United States, and, according to Pitchbook (venture capital investment tracker), is also ranked as the largest in the past 17 years in terms of investments that do not rely on money coming from a single deep-pocketed company.
In 2023, Microsoft supported OpenAI by investing an amount of $10 billion in the company. In exchange, they received a significant stake in the company as it continued to grow since then.
Microsoft here shadowed the same tactic employed by the Altria Group when they invested $12.8 billion into vaping company Juul, which now faces its back against the wall.
OpenAI says they will now be able to double down on their leadership in frontier AI research, increase compute capacity, and continue building tools that help people solve hard problems when it comes to the new financing. According to the corporation, the money will “accelerate progress on our mission” and give it a market worth of $157 billion.
The financial infusion coincides with OpenAI’s efforts to more completely transform from a nonprofit research organisation into a for-profit business answerable to shareholders.
The majority of the employees at San Francisco-based OpenAI work in its quickly expanding for-profit division, but the company is still governed by a nonprofit board of directors whose goal is to advance humankind by safely creating futuristic artificial intelligence that is capable of performing tasks more effectively than humans.
Along with Thrive Capital, the funding backers include MGX, Altimeter Capital, Khosla Ventures, ARK Invest, Fidelity Management and Research Company, and Tiger Global Management. Microsoft even mentioned in a brief statement they put out, that they are looking forward to continuing the business partnership they have had with OpenAI.