OpenAI secures £5.4bn investment amidst major restructuring
OpenAI, the creator of ChatGPT, received £5.4 billion in the latest financing round. The funds were raised, among others, from Microsoft and Nvidia. The company's valuation could reach a staggering amount of £128 billion, positioning OpenAI among the most valuable private enterprises in the world.
Other significant entities also participated in the financing round, including Altimeter Capital, Fidelity, SoftBank, and MGX, an Abu Dhabi state investment fund. Thrive Capital's investment reached £982 million, with an option for an additional £819 million next year. It is worth noting that Apple, despite earlier speculations, ultimately decided not to participate in this financing round, reports Bloomberg.
Artificial intelligence in demand
The acquisition of such substantial capital coincides with significant organisational changes at OpenAI. The company is restructuring and experiencing changes in key positions, exemplified by the recent departure of long-standing Chief Technology Officer Mira Murati. Despite these challenges, investors show unwavering enthusiasm, basing their expectations on the forecasts Sam Altman, CEO of OpenAI, presented.
The company's financial projections are impressive. OpenAI anticipates reaching revenues of £2.9 billion this year, with losses exceeding £4.1 billion. A significant increase in revenues to £9.5 billion is projected for 2024. These ambitious financial goals reflect the company's dynamic growth, which has increased its valuation from £11 billion in 2021 to the current £128 billion in just a few years.
OpenAI continues to work on artificial general intelligence (AGI), striving to create AI systems that surpass human intelligence. At the same time, the company intensifies commercialisation efforts, aiming to achieve profitability. The popularity of OpenAI's products is impressive—ChatGPT currently attracts 250 million active users weekly.
Transaction details
The structure of the acquired financing is based on convertible bonds. The conversion to equity depends on the successful transformation of OpenAI into a profit-oriented entity, which involves relinquishing control held by the non-profit organisation's board and removing the return cap for investors. Negotiations on this matter are ongoing, though specific timelines have not yet been established.
Investors have secured their interests by negotiating clauses allowing them to recover their invested capital or renegotiate the valuation if the planned structural changes are not implemented within two years. Additionally, OpenAI plans to enable employees to cash out their shares in the company through a stock buyback offer. However, details and timelines of this operation have not yet been established.
