OpenAI secures $6.6 billion in funding from Microsoft, Nvidia

Funding round comes amidst restructuring within OpenAI, following departure of its CTO Mira Murati

OpenAI, the company behind ChatGPT, has raised $6.6 billion from investors, positioning it as one of the world's most valuable private companies with a potential valuation of $157 billion.

Major investors include returning venture capital firms like Thrive Capital and Khosla Ventures, as well as Microsoft and new participant Nvidia.

This funding round comes amidst significant restructuring within OpenAI, following the sudden departure of its longtime Chief Technology Officer, Mira Murati.

Other investors in this round include Altimeter Capital, Fidelity, SoftBank, and Abu Dhabi's MGX.

These funds will provide liquidity to some employees via a tender offer to buy back their shares, though the details have yet to be finalized.

Thrive Capital, which committed $1.2 billion, has the option to invest another $1 billion next year if OpenAI reaches a specific revenue target.

Apple had been in talks to invest but ultimately did not participate in the funding round.

OpenAI's financial structure remains complex.The funding came as convertible notes, which will only convert to equity if OpenAI successfully transitions into a for-profit entity, eliminating restrictions on investor returns.

Despite these corporate shifts, OpenAI continues to experience significant growth.

The company is on track to generate $3.6 billion in revenue this year, though it's also facing losses of more than $5 billion

 OpenAI's revenue is expected to rise sharply next year, reaching $11.6 billion.

The company has rapidly grown in popularity, with its ChatGPT service attracting over 250 million weekly active users.

Its valuation has skyrocketed from $14 billion in 2021 to $157 billion today, with revenue growth far exceeding previous expectations.

Investors remain optimistic about OpenAI's long-term potential, as the company continues to push for advancements in artificial general intelligence (AGI).

As OpenAI ramps up commercialization, changes are expected for its ChatGPT Plus subscription.

The current $20 monthly fee is set to rise by $2 before the end of the year, with projections suggesting it could increase to $44 per month by 2029, reflecting broader industry trends of rising prices for digital services.

Increased subscription prices mirror broader shifts seen in streaming services, with competitors like YouTube and Disney also announcing price hikes in 2024.

It remains unclear whether OpenAI will introduce more affordable subscription tiers or alternatives in the future.

Competitors like Google and Microsoft offer similar AI services at the $20 per month price point, but this could change amid growing industry price pressures.

This latest funding round is expected to support OpenAI’s ongoing research into AGI while boosting its commercial prospects.

The company’s rapid rise in both product popularity and financial success continues to draw global attention as it pursues breakthroughs in AI technology.