OpenAI is worth $157 billion

OpenAI has raised $6.6 billion in a massive funding round that values the startup at $157 billion, putting it among a tiny club of tech startups pushing private company valuations to astronomical heights.

The deal, valued at roughly double OpenAI’s valuation back in February, underscores investors’ fervent expectations for the generative AI boom that OpenAI ushered in with the release of ChatGPT in 2022.

“The new funding will enable us to double our leadership in pioneering artificial intelligence research, increase computing power, and continue building tools that help people solve difficult problems,” OpenAI said in Wednesday’s announcement of the agreement.

The funding comes at a time when the nine-year-old artificial intelligence startup led by CEO Sam Altman faces increasing competition from the likes of Google, Meta and other artificial intelligence startups, and at a time when OpenAI has been dealing with its own development woes — the most notorious of which include last year’s management coup that saw Altman briefly fired and then reinstated within five days.

Since then, the company has been plagued by a series of high-level departures as it tries to evolve from its roots as a nonprofit research lab to a commercial product maker benefiting from an industry-wide AI gold rush. Last month, OpenAI Chief Technology Officer Mira Murati unexpectedly resigned to “create time and space for my own exploration.” And as Fortune this week, some insiders have expressed concerns that the company’s safety commitments have fallen by the wayside in its rush to release new products ahead of competitors.

Despite the internal turmoil, investors seemed eager to acquire part of the startup.

OpenAI did not disclose the names of the investors, but it was confirmed by venture capital firm Thrive Capital Fortune in an email that he invested and led the latest round. According to Bloomberg, which first reported the deal, the round also included Abu Dhabi-based Khosla Venture, Altimeter Capital, Fidelity, Softbank and MGX, as well as AI chipmaker Nvidia and Microsoft, which previously invested $13 billion in OpenAI. Although it has been reported that Apple is exploring the possibility of investing in OpenAI, the iPhone maker is not participating in this round, Axios reports, citing a source.

250 million users per week ChatGPT

With the funding, OpenAI strengthens its status as one of the world’s most valuable startups, overtaking TikTok owner ByteDance’s $225 billion and Elon Musk’s $200 billion space exploration company SpaceX, according to valuations of unicorn tech companies by CB Insights.

OpenAI said Wednesday that more than 250 million people around the world use ChatGPT every week. The company does not disclose its financial results, although the New York Times reported that OpenAI’s monthly revenues in August reached $300 million and forecasts that it will achieve revenues of $11.6 billion next year.

OpenAI’s new $157 billion post-cash valuation appears to value the company at 13 times next year’s projected revenue. By comparison, Alphabet, Google’s parent company, has IPO revenues 5.3 times expected next year, while Nvidia has sales around 16 times higher.

OpenAI addressed its assumptions on Wednesday, saying it is “making progress on our mission to ensure that artificial intelligence benefits all of humanity.” Artificial general intelligence (AGI) is still a theoretical concept of an artificial intelligence system that can perform tasks as well as or better than humans. The potential dangers of AGI were one of the reasons for founding OpenAI in 2015, when Altman, Elon Musk and the other co-founders sought to create a counterweight to Google’s Deep Mind, which they feared would advance AGI based on purely commercial interests.

Musk, who later left OpenAI, accused the company of abandoning its original mission even though it launched its own commercial artificial intelligence company, xAI.

OpenAI’s valuation has almost doubled from its level earlier this year, when it issued an employee tender offer to sell some of its shares to private investors in a deal that valued it at about $80 billion.

This story was originally published on Fortune.com