ChatGPT owner OpenAI is valued at $157 billion after funding from Microsoft, Nvidia

OpenAI has raised $6.6 billion from investors at a post-money valuation of $157 billion, the company announced Wednesday, cementing the ChatGPT creator’s status as one of the world’s most valuable private companies.

The funding has attracted returning venture capital investors, including Thrive Capital and Khosla Ventures, as well as OpenAI’s largest corporate backer, Microsoft, and new participation from Nvidia.

The closing of the funds coincides with the company’s ongoing restructuring efforts and executive changes, including the sudden departure of its longtime Chief Technology Officer, Mira Murati, last week.

Altimeter Capital, Fidelity, SoftBank, Abu Dhabi’s state investment firm MGX also participated in the round.

The funding came in the form of convertible notes and is contingent on a successful structural change to a for-profit that would no longer be controlled by the non-profit board and the removal of the cap on returns to investors.

The personnel changes haven’t dampened enthusiasm from most investors, who expect significant growth based on predictions from OpenAI CEO Sam Altman and CFO Sarah Friar.

The company is on pace to generate $3.6 billion in revenue this year with growing losses of more than $5 billion. It anticipates a big increase in revenue next year to $11.6 billion, according to sources familiar with the figures.

Investors have also secured some protection as OpenAI undergoes complex corporate restructuring that would give Altman capital. Talks are still ongoing and no timeline has been set yet.

Investors have negotiated terms that would allow them to withdraw their capital or renegotiate the rating if changes are not implemented within two years, the sources said.

OpenAI’s meteoric rise in terms of product popularity and appreciation has captured the imagination of the world. Since ChatGPT’s launch, it has attracted 250 million weekly active users. The company’s valuation has also increased from $14 billion in 2021 to $157 billion after growing revenue from zero to $3.6 billion, far exceeding Altman’s own projections at the time.

The company has told investors it is still actively pursuing artificial general intelligence (AGI), meaning the development of AI systems that surpass human intelligence, as it ramps up commercialization and tries to be profitable.