This funding round has seen the return of notable venture capital firms such as Thrive Capital and Khosla Ventures, alongside OpenAI's primary corporate supporter, Microsoft, and new involvement from Nvidia.
The completion of this funding coincides with the company's ongoing restructuring initiatives and changes in leadership, including the unexpected resignation of its long-serving Chief Technology Officer, Mira Murati, last week.
Other participants in this funding round include Altimeter Capital, Fidelity, SoftBank, and Abu Dhabi's state-backed investment firm MGX.
OpenAI's Chief Financial Officer, Sarah Friar, informed employees on Wednesday that the company plans to offer liquidity through a tender offer to repurchase their shares, although specific details and timing remain undecided, according to a source. Earlier this year, the company permitted some employees to sell their shares at a valuation of $86 billion.
Thrive Capital, which contributed approximately $1.2 billion through its own fund and a special purpose vehicle for smaller investors, has negotiated the option to invest an additional $1 billion next year at the same valuation, contingent upon the AI firm achieving a revenue target, sources indicated.
Although Apple was in discussions to invest in OpenAI, it ultimately chose not to participate in this funding round, according to sources who requested anonymity. Apple has not yet responded to requests for comment.
The funding was structured as convertible notes, with the conversion to equity dependent on a successful transition to a for-profit model that would no longer be governed by the non-profit board and the elimination of return caps for investors.
Despite the leadership changes, investor enthusiasm remains high, with many anticipating substantial growth based on projections from OpenAI CEO Sam Altman.
The company is projected to achieve $3.6 billion in revenue this year, despite incurring losses exceeding $5 billion. It anticipates a significant revenue increase next year, reaching $11.6 billion, according to sources familiar with the situation.
Investors have secured certain protections as OpenAI navigates a complex corporate restructuring that would provide Altman with equity. Discussions are ongoing, and a timeline for completion has yet to be established.
Sources indicate that investors have negotiated terms allowing them to recover their capital or renegotiate the valuation if the proposed changes are not executed within two years.
OpenAI's rapid ascent in product popularity and valuation has captivated global attention. Since the introduction of ChatGPT, the platform has garnered 250 million weekly active users. The company's valuation has surged from $14 billion in 2021 to $157 billion, with revenue growth from zero to $3.6 billion, significantly surpassing Altman's initial forecasts.
The company has informed investors that it remains committed to pursuing artificial general intelligence (AGI), which involves developing AI systems that exceed human intelligence, as it intensifies its commercialization efforts and aims for profitability.