San Francisco-based AI powerhouse OpenAI announced on Monday that it will raise $40 billion in a fresh funding round led by SoftBank Group, valuing the company at a staggering $300 billion. The capital infusion aims to advance AI research, expand computational infrastructure and enhance OpenAI’s suite of AI tools.
A Reuters report quoted sources as saying that SoftBank will contribute 75% of the funding, while the remainder will come from existing investors, including Microsoft, Coatue Management, Altimeter Capital and Thrive Capital.
The latest funding round nearly doubles OpenAI’s valuation from $157 billion in October, when it secured $6.6 billion in investment. The latest capital injection places OpenAI among the most valuable private companies globally like SpaceX, China’s ByteDance and fintech Stripe.
In addition to securing new funding, OpenAI is preparing for a structural shift. The company plans to transition into a public benefit corporation in order to attract further investment while maintaining a balance between shareholder interests and public benefit.
A source familiar with the matter told Reuters that OpenAI must complete this transition to a for-profit entity by the end of the year to access the full $40 billion investment. According to a CNBC report, the funding round could be reduced by up to $10 billion if the company fails to transition into a for-profit entity by December 31.
With surging user adoption, OpenAI’s flagship chatbot, ChatGPT, has witnessed explosive growth. The company revealed that ChatGPT now boasts 500 million weekly users, up from 400 million last month. CEO Sam Altman highlighted the platform’s unprecedented expansion in a post on X, stating, “The ChatGPT launch 26 months ago was one of the craziest viral moments I’d ever seen, and we added one million users in five days,” adding, “we added one million users in the last hour..”
OpenAI also projects a substantial revenue surge, expecting earnings to triple to $12.7 billion by year-end.
