OpenAI secures $40 billion in record-breaking funding round, valuation hits $300 billion

OpenAI has completed the largest private tech funding round in history, raising $40 billion and achieving a valuation of $300 billion.

This monumental investment places OpenAI among the most valuable private tech companies globally, second only to SpaceX at $350 billion and tied with ByteDance, the parent company of TikTok.

The funding round was led by Japan’s SoftBank, contributing $30 billion, alongside investments from Microsoft, Coatue, Altimeter, and Thrive.

OpenAI plans to use the capital to “push the frontiers of AI research even further” and expand its computing infrastructure, according to a company blog post.

A significant portion of the funds—about $18 billion—will be allocated to Stargate, OpenAI’s joint venture with SoftBank and Oracle, which was announced by U.S. President Donald Trump in January.

However, the investment comes with conditions: SoftBank’s total commitment could drop to $20 billion if OpenAI does not restructure into a for-profit entity by December 31. This would mean abandoning OpenAI’s capped-profit model, introduced in 2019, which limits investor returns and channels excess profits back into research.

Prior to OpenAI’s record-breaking $40 billion round, the largest private tech funding rounds included Ant Group’s $14 billion in 2018, Juul Labs’ $12.8 billion the same year, and DiDi Global’s $10.8 billion in 2019. OpenAI’s own $10 billion raise in 2023 had previously ranked among the biggest in recent years.

Investors are betting big on OpenAI’s rapid growth, driven by the success of ChatGPT. The AI chatbot now boasts 500 million weekly users, up from 400 million just a month ago. The company expects its revenue to triple to $12.7 billion by the end of 2024.

OpenAI CEO Sam Altman underscored the explosive growth, recalling ChatGPT’s viral rise. “One of the craziest viral moments I’d ever seen, and we added one million users in five days and added one million users in the last hour,” he remarked.

The AI industry is projected to generate over $1 trillion in revenue within the next decade, and competition is heating up as Google, Amazon, Anthropic, and Perplexity race to develop advanced AI agents.

In a strategic shift, OpenAI recently announced leadership changes. CEO Sam Altman will focus more on research and product development, while Chief Operating Officer Brad Lightcap takes on an expanded role overseeing the company’s business operations.

With this unprecedented funding round, OpenAI is poised to accelerate advancements in AI technology and redefine the future of artificial intelligence.

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