ChatGPT maker Open AI raises $6.6 billion in venture capital

OpenAI announced Wednesday that it has raised $6.6 billion in venture capital investment as part of a broader exit from ChatGPT maker from its nonprofit roots.

Led by venture capital firm Thrive Capital, the funding round was backed by tech giants Microsoft, Nvidia and SoftBank, according to a source familiar with the funding who was not authorized to speak publicly about it.

According to PitchBook, which tracks venture capital investments, the investment represents one of the largest fundraising rounds in U.S. history and is believed to be the largest in the last 17 years to not include money from a single well-funded company.

Microsoft has pumped up OpenAI last year with a $10 billion investment in exchange for a big stake in the company's future growth, mirroring a strategy used by tobacco giant Altria Group in 2018 when it invested $12.8 billion in the company invested the now struggling e-cigarette startup Juul.

OpenAI said the new funding “will allow us to double our leadership in AI research, increase computing capacity, and continue to develop tools that help people solve difficult problems.” The company said the funding provides it a market value of $157 billion and will “accelerate the progress of our mission.”

The influx of money comes as OpenAI seeks to more fully transform itself from a nonprofit research institute into a for-profit company accountable to its shareholders.

While San Francisco-based OpenAI already has a fast-growing, for-profit division where most of its employees work, it is controlled by a nonprofit board whose mission is to help humanity through safe construction futuristic forms of artificial intelligence who can complete tasks better than humans.

That puts certain limits on how much profit it makes and how much shareholders get in return for costly investments in computing power. specialized AI chips and computer scientists needed to develop generative AI tools. But the governance structure would change if the board implements a plan to transform itself into a nonprofit corporation, a type of business entity designed to help society while generating profits.

In addition to Thrive Capital, backers include Khosla Ventures, Altimeter Capital, Fidelity Management and Research Company, MGX, ARK Invest and Tiger Global Management.

Microsoft said in a brief statement Wednesday that it looks forward to continuing its OpenAI partnership. Nvidia, a leading developer of chips needed to build and operate AI systems, declined to comment. The size of each backer's investment was not disclosed.

Apple is not participating in the round, despite speculation that it may have a stronger interest in the future of OpenAI afterward I recently teamed up with to integrate the company Integrate ChatGPT into your products.

Brendan Burke, an analyst at PitchBook, said that while OpenAI's existing close partnership with Microsoft has provided broad access to computing power, the company still “needs follow-on funding to expand model training efforts and develop proprietary products.”

Burke said it will also help it compete with competitors like Elon Musk's startup xAI, which recently raised $6 billion and is working to build custom data centers like one in Memphis, Tennessee. Musk, who helped fund OpenAI's early years as a nonprofit, has become a harsh critic the commercialization of the company.

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Associated Press writers Michael Liedtke in San Francisco and Kelvin Chan in London contributed to this report.

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