Category: Stock Market

OpenAI has closed a deal to raise $122 billion from investors at a valuation of $852 billion. This represents the company’s largest funding round to date and supports its expensive pursuit of additional chips, data centers, and talent.

Three major tech companies provided the majority of the funding after months of planning. Amazon. com, decided to contribute $50 billion to the funding round, while Nvidia and SoftBank Group Corp.

Each contributed $30 billion. Amazon’s $35 billion investment is largely dependent on OpenAI going public or achieving the technological milestone of artificial general intelligence. A long list of other notable backers, such as Andreessen Horowitz, Abu Dhabi’s MGX, and D.E, provided funding to the ChatGPT creator. TPG, Shaw Ventures, and T. Price Rowe. The funds raised are part of the company’s valuation.

The funding “blows out of the water even the largest IPO that’s ever been done,” according to OpenAI Chief Financial Officer Sarah Friar.  According to her, the agreement is intended to provide the company with “a lot of flexibility” to invest in computing resources and its AI roadmap during a period of increased market uncertainty, including that resulting from the Iran war.

The AI developer has previously stated that it will invest more than $1.4 trillion in physical infrastructure over the next few years to support its AI software. An overlapping group of venture funds and tech companies, including their cloud and chip suppliers like Amazon and Nvidia, has been enlisted by OpenAI and rival Anthropic PBC to fund those bets.