AI Innovator OpenAI Aims for Profitability as it Rivals Uber in Market Value
OpenAI has successfully raised $6.6 billion (£5 billion) in a recent funding round, bringing its valuation to an impressive $157 billion. This round saw participation from prominent investors such as chipmaker Nvidia and Japan’s SoftBank, reflecting strong confidence in the artificial intelligence sector.
The San Francisco-based startup, known for its ChatGPT chatbot, has not disclosed specifics about a planned restructuring that would transition it into a for-profit entity. Leading the funding efforts was Thrive Capital, a U.S. venture capital firm, with additional support from MGX, an investment firm backed by Abu Dhabi.
With this latest funding, OpenAI’s valuation aligns it with Uber, although it remains significantly below the $3 trillion valuation of Microsoft, its largest investor, which also took part in this funding round.
Other notable investors include Nvidia, a key player in the semiconductor industry crucial for AI model training, and SoftBank, which holds investments in the UK chip designer Arm.
Sarah Friar, OpenAI’s chief financial officer, emphasized the widespread appeal of ChatGPT, stating, “Every week, over 250 million people turn to ChatGPT regardless of the scale of the challenge – whether it’s communicating with someone who speaks another language or solving the toughest research problems. AI is already personalising learning, accelerating healthcare breakthroughs, and driving productivity. And this is just the start.”
Despite the funding, OpenAI is reportedly facing a projected loss of $5 billion this year. The funds raised will enable the company to “double down” on advanced AI research and enhance its “compute capacity,” a significant expense in the development and operation of robust AI models.
While details on the anticipated corporate restructuring remain undisclosed, this shift could potentially lead OpenAI to relinquish its non-profit status, transitioning fully into a for-profit organization. Currently, the company operates under a non-profit board, alongside a for-profit subsidiary with Microsoft as its principal investor, which caps returns for investors and employees. Reports suggest that Sam Altman, OpenAI’s chief executive, might also gain a stake in the restructured company.
Concerns have been raised regarding the proposed restructuring. A former OpenAI employee, William Saunders, voiced apprehension that it might incentivize the startup to compromise on safety measures.
OpenAI’s charter remains committed to developing artificial general intelligence, defined as “systems that are generally smarter than humans,” with the goal of benefiting “all of humanity.”
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