OpenAI Secures $8.3B at $300B Valuation Amid Rapid Growth

OpenAI, the company behind the widely popular ChatGPT, has reportedly secured $8.3 billion in a new funding round, valuing the artificial intelligence giant at an impressive $300 billion. This significant capital injection is part of OpenAI’s ambitious strategy to raise a total of $40 billion this year, according to reports from The New York Times.

The oversubscribed funding round closed months ahead of schedule, reflecting intense investor interest and the company’s rapid growth. This latest raise follows an initial $2.5 billion secured from venture capital firms in March, which was part of a larger $40 billion target round spearheaded by SoftBank. OpenAI had originally planned to raise an additional $7.5 billion by the end of the year, but the strong demand from investors eager to participate in its growth accelerated the process.

The company’s impressive financial performance and user engagement are key drivers of this investor appetite. Recent reports from The Information indicated OpenAI had reached $12 billion in annualized revenue and surpassed 700 million weekly active users for ChatGPT. The New York Times subsequently reported that the annualized revenue figure is closer to $13 billion, with projections to reach $20 billion by the end of the year.

Further bolstering OpenAI’s position are ongoing strategic discussions with Microsoft and broader government initiatives aimed at fostering AI development. These factors contribute to OpenAI’s long-term objective of transitioning into a fully for-profit entity.

The latest funding round was reportedly led by Dragoneer Investment Group, which contributed a substantial $2.8 billion. A diverse group of new investors joined, including private equity firms Blackstone and TPG, alongside mutual fund manager T. Rowe Price. Other notable participants included Altimeter Capital, Andreessen Horowitz, Coatue Management, D1 Capital Partners, Fidelity Management, Founders Fund, Sequoia Capital, Tiger Global, and Thrive Capital.

However, the rapid influx of new capital reportedly led to smaller allocations for some of OpenAI’s early investors, as the company prioritized bringing in new strategic backers. OpenAI has not yet publicly commented on these reports.