Sam Altman’s OpenAI is now on the cusp of securing a significant round of funding that could value the company at over $100 billion, reports WSJ. This comes at a time when the company engages in negotiations with a group of investors led by Thrive Capital, which is expected to contribute approximately $1 billion to the round. The funding effort has yet to be publicly announced.
Thrive Capital’s involvement in this funding round is notable, given its history of backing transformative technology companies. The firm’s anticipated $1 billion investment highlights its strong belief in OpenAI’s future growth and potential. Thrive’s participation is expected to attract other major investors, including Microsoft, which has been a key backer of OpenAI since its inception. Microsoft has already invested more than $13 billion in OpenAI, with a significant $10 billion infusion in early 2023. This partnership has been crucial in providing OpenAI with the necessary infrastructure and resources to develop and scale its AI models, particularly through access to Microsoft’s cloud computing capabilities.
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The decision to pursue additional funding at such a high valuation indicates that OpenAI is positioning itself to capitalize on the rapid advancements in AI technology. The company’s valuation, which was last reported at $86 billion earlier this year, has seen a dramatic increase in recent times, mostly led by the success of ChatGPT.
According to an internal memo from Sarah Friar that WSJ accessed, OpenAI’s Chief Financial Officer, a portion of the newly received funds will be allocated towards enhancing the company’s computing power, which is essential for the continued development and deployment of AI models. The additional capital will enable OpenAI to scale its operations and meet the growing demand for its AI solutions. Moreover, the funding will also support other operational expenses, including staffing and research initiatives. OpenAI has been at the forefront of AI research, developing cutting-edge technologies that push the boundaries of what AI can achieve. One such initiative is the development of a new model, often referred to as GPT-5, which is expected to build on the capabilities of the existing GPT-4 model. Additionally, OpenAI is working on a technology called “Strawberry,” aimed at improving the reasoning capabilities of its language models.
In addition to its focus on AI model development, OpenAI is also exploring new avenues for market expansion. The company recently announced the testing of a new search engine, SearchGPT, which aims to revolutionize the way users interact with search engines by providing more natural, conversational responses.
