OpenAI Raises More Funding, Valuation Now Up to $29 Billion: Report

Summary:

• OpenAI has closed a $300 million USD funding round at a valuation of $27-29 billion.
• The share sale is separate from a $10 billion investment from Microsoft announced in January.
• Backers include venture capital firms Tiger Global, Sequoia Capital, Andreessen Horowitz, Thrive, K2 Global, and Founders Fund.

OpenAI, the company that created the wildly popular chatbot ChatGPT, recently completed a $300 million USD share sale at a valuation of $27-29 billion, according to a report from TechCrunch.

The latest funding round is separate from a $10 billion investment from Microsoft announced back in January. According to TechCrunch, investors involved in the $300 million share sale include venture capital firms Tiger Global, Sequoia Capital, Andreessen Horowitz, Thrive, K2 Global, and Founders Fund.

Investors have already signed the term sheets and transferred the money, TechCrunch said, and the sale will be closed once OpenAI countersigns. The parties originally planned to announce this investment sometime next week.

Per data from PitchBook, Tiger Global, Sequoia Capital, and Andreessen Horowitz had been earlier investors in OpenAI as well, while K2 Global, Thrive, and Founders Fund are new backers. Outside investors now own more than 30% of OpenAI, one source told TechCrunch.

OpenAI has been the largest beneficiary of the AI arms race it sparked when it launched ChatGPT back in November 2022. The conversational AI model hit 100 million active users in record time and became the fastest-growing web app ever, boosting investor interest in AI and machine learning to an all-time high.

Even tech companies that are currently laying off personnel in most areas and slashing entire projects due to a global financial crunch, like Facebook and WhatsApp parent company Meta, are investing heavily in AI to get ahead of the pack.

In addition to ChatGPT and GPT, the large language model that underpins it, some of OpenAI’s other endeavours include Dall-E, an AI image generator, and Whisper AI, a speech recognition model. OpenAI is also offering a more premium ChatGPT experience as a paid subscription and licensing its tech to businesses through APIs.