OpenAI has reportedly raised $8.3 billion from investors as part of a funding round that could eventually be worth up to $40 billion.
Sources told the New York Times today that Dragoneer led the deal. The asset manager, which reportedly made a $2.3 billion investment, was joined by a dozen other institutional backers. The group included T. Rowe Price, Blackstone, Sequoia, Tiger Global and other prominent investors.
OpenAI reportedly closed the deal several months earlier than originally planned. According to the Times, the ChatGPT developer gave existing investors smaller allocations than they had sought in order to prioritize new backers. The report described the deal as oversubscribed.
The strong investor interest in the raise may have been driven by OpenAI’s latest set of growth milestones. According to the Times, the artificial intelligence provider’s annualized recurring revenue recently topped $13 billion. OpenAI is believed to have 5 million paying business customers and 700 million weekly active users.
The early momentum of OpenAI for Countries may have also boosted investor interest in the funding round. Launched in May, OpenAI for Countries is an initiative that will see the AI provider help governments build local AI infrastructure.
On Thursday, OpenAI announced plans to build a data center in Norway with 230 megawatts of initial capacity. The facility will be equipped with 100,000 Nvidia Corp. graphics cards by the end of 2026. OpenAI earlier inked an agreement to build a 5-gigawatt AI data center campus in Abu Dhabi.
OpenAI’s latest $8.3 billion raise is part of a larger funding round that could be worth as much as $40 billion. In March, CNBC reported that SoftBank Group Corp. is set to provide $30 billion while the rest will come from other backers.
The Japanese conglomerate’s investment is contingent on the completion of a restructuring initiative that OpenAI launched earlier this year. Currently, the ChatGPT developer operates as a nonprofit with a for-profit arm that leads its AI research and commercialization efforts. OpenAI plans to restructure the for-profit arm as a public benefit corporation by the end of the year.
Beyond its role as an investor, SoftBank is a key participant in the ChatGPT developer’s Stargate initiative. The program seeks to build a network of AI data centers for OpenAI at a cost of up to $500 million. SoftBank owns the Stargate trademark, while its SB Energy renewable energy subsidiary could reportedly play a role in some Starlink construction projects.
OpenAI’s latest raise comes amid a report that Anthropic PBC is also seeking new funding. According to The Information, the company is in talks to raise a $5 billion round that could value it at $170 billion. Iconiq is expected to lead the investment with a $1 billion check.
Like OpenAI, Anthropic is experiencing rapid sales growth. On Wednesday, Bloomberg reported that the company’s annualized revenue grew from $4 billion in early June to $5 billion by the end of the month. Anthropic expects to reach $9 billion by 2026.
Image: Unsplash
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