The investors behind OpenAI’s $6.6 billion raise

• OpenAI’s $6.6 billion fundraising has attracted some big names in the industry.
• Investors were forced to pay huge sums and avoid future investments in OpenAI rivals.
• OpenAI is now valued at $157 billion after taking into account its latest funding, making it one of the most valuable startups in the world.

Sam Altman has taken his share of bumps and bruises over the past year, but he’s proven once again that he can convince investors to pour hundreds of millions into OpenAI.

The latest round of funding appeared to be Silicon Valley’s hottest ticket, attracting a who’s who of investors looking to participate in the AI ​​startup’s most high-profile fund-raising.

The $6.6 billion round gave OpenAI a post-money valuation of $157 billion and made it one of the world’s most valuable startups. The startup’s valuation is now in the same neighborhood as publicly traded companies like Uber or AT&T.

In a statement posted on its website, OpenAI said the funding would “accelerate progress in our mission” and that it was “grateful to our investors for their trust in us.”

The investors’ participation — which meant they would not have to invest in rival AI companies — comes as OpenAI discusses how to transform from a nonprofit to a more traditional for-profit company, and several high-level executives they left it to chance. join your rivals or start your own business.

Here’s who broke their checkbooks.

The prosperous capital

Thrive Capital led the funding round, a spokesperson confirmed to Business Insider. The VC firm, founded by Josh Kushner, made early investments in several now prominent companies such as Slack and Instagram and previously invested in OpenAI.

The venture firm invested about $1.25 billion, according to a report by The Wall Street Journal. Thrive also has an option to invest another $1 billion in OpenAI next year at its current valuation if a revenue target is met, Reuters reported last month.

In addition to being an investor in OpenAI, Kushner is close to Altman, The Information reported last month. “I have been fortunate to work with many great investors; there is no one I would recommend more than Josh,” Altman wrote in a post on X, formerly known as Twitter, in August.

SoftBank

The highly anticipated funding round also attracted newcomers like SoftBank. A source close to the Japanese media technology conglomerate told Business Insider that it invested $500 million.

The deal gives the Tokyo-headquartered company, led by enigmatic founder Masayoshi Son, its first major stake in a company that develops large language models (LLMs) that have fueled popular apps like ChatGPT in the generative AI boom.

While SoftBank led several investments in AI-related Silicon Valley firms before the generative AI boom through its Saudi-backed Vision Fund, it has been slow to invest in a post-ChatGPT world as it sought to repair his reputation after his disaster. I bet WeWork.

However, Son has signaled in recent months that he would be ready to make another investment to capture opportunities from the generative artificial intelligence frenzy.

At the company’s annual meeting in June, the SoftBank founder told shareholders that previous investments were just a “warm-up” for AI and advancing the technology was “what I was born to do.”

ARK venture fund

Cathie Wood’s ARK Venture fund has agreed to invest at least $250 million in this funding round, which is the second investment for the company, Business Insider first reported. Ark has also invested in several other high-profile startups such as Anthropic, xAI, SpaceX, FigureAI and Databricks.

Wood compared the state of artificial intelligence to that of the Internet in the early 1990s in an April interview with Morningstar.

“We had just started and had miles to go,” Wood said. “Actually, we’re still learning how powerful the internet is. That’s where we are today with artificial intelligence.”

ARK did not immediately respond to a request for comment from BI.

Microsoft

Microsoft invested just under $1 billion in OpenAI’s latest funding round, according to The Wall Street Journal report. The tech giant has a partnership with OpenAI and has already invested $13 billion in the company. Rival Apple looked into its own investment in OpenAI, though nothing came of the talks.

Microsoft has also added OpenAI technology to Bing, its search engine, and its Copilot AI tools, as well as some of its other products.

Microsoft did not immediately respond to a request for comment from BI.

Nvidia

Nvidia is no stranger to the AI ​​spotlight, with its chips the best-in-class option for companies like OpenAI building frontier AI models.

Nvidia invested about $100 million in OpenAI’s funding round, according to the Journal report.

Nvidia declined to comment, referring BI to OpenAI.

Tiger Global

Tiger Global Management also invested in OpenAI’s latest funding round, Business Insider reported. The amount of the contribution could not be ascertained.

The company has invested aggressively in technology in recent years, making 335 investments in 2021, according to Crunchbase. Since then, the company has scaled back its number of investments per year as the market soured, but it purchased $125 million in OpenAI stock in 2021.

Fidelity

Fidelity also participated in OpenAI’s latest funding round. The asset manager recently participated in a funding round for Elon Musk’s xAI.

Fidelity often invests in late-stage startups that could go public in IPOs a few years later. The strategy can help big mutual fund firms get ahead of potentially hot IPOs at a lower price.

Altimeter Capital Management

Altimeter Capital Management also contributed to OpenAI’s latest funding round, according to reports. Altimeter did not immediately respond to a request for comment from BI.

Brad Gerstner, the investment firm’s CEO and founder, said at an AI conference on Wednesday after the seed round announcement that OpenAI’s next move should be an IPO.

“Having the opportunity for every retail investor in America to share in the upside created by AI at a time when we’re going to have massive social disruption, lost jobs and other things, I think is extremely important,” Gerstner said. according to GeekWire.

Khosla Ventures

Khosla Ventures also participated in the funding round.

Vinod Khosla, who co-founded Sun Microsystems, recently wrote in a long post on his VC firm’s website, that AI would cut costs and take over most of the work that humans do — and do it better, for the most part. He also predicted that there will be a billion robots in the next 25 years.

Khosla previously invested in OpenAI.

MGX

MGX, a UAE-backed investment firm, participated in OpenAI’s latest round, Reuters reported. The firm did not immediately respond to a request for comment after business hours.

The firm was formed earlier this year to invest in artificial intelligence and semiconductors, Bloomberg reported in March. At the time, MGX was aiming to have $100 billion under management in the coming years.