OpenAI closes $110 billion funding round in largest private financing

OpenAI closed a $110 billion funding round; That’s more than twice the size of the last raise a year ago, a record for a private technology company.

Amazon invested 50 billion dollars Nvidia invested 30 billion dollars and SoftBank OpenAI said Friday it is investing $30 billion in this round. Investment raises OpenAI to $730 billion The pre-money valuation marks a big jump from the $500 billion valuation in secondary financing in October. Other investors are expected to join as the round progresses, OpenAI said.

“These partnerships expand our global reach, deepen our infrastructure, and strengthen our balance sheet so we can deliver leading-edge AI to more people, more businesses, and more communities around the world,” OpenAI said. he said.

Along with its participation in the funding round, Amazon also announced a multi-year agreement. strategic partnership With OpenAI. According to the statement, as part of the agreement, the companies will develop customized models that will help strengthen Amazon’s customer-facing applications.

OpenAI said it would increase its current $38 billion deal with Amazon Web Services by $100 billion over the next eight years. AWS will also serve as the exclusive third-party cloud delivery provider for OpenAI’s enterprise platform Frontier, which it introduced earlier this month.

Amazon’s $50 billion investment in OpenAI will begin with an initial commitment of $15 billion, followed by a $35 billion commitment “in the coming months, once certain conditions are met,” the companies said.

In the more than three years since the launch of ChatPGT, OpenAI has reshaped the tech industry and defined the era of generative AI. But the company continues to be cash-strapped, especially to fund its goals of paying for graphics processing units and other infrastructure.

OpenAI is telling investors it’s targeting total computing spending of about $600 billion by 2030, months after CEO Sam Altman announced $1.4 trillion in infrastructure commitments, CNBC was first to report it last week.

The company provided a lower figure and a more defined timeline for its planned spending, sources told CNBC, amid broader concerns that its expansion targets are too big for potential future revenue.

While OpenAI maintains its leadership in the consumer AI market, it faces increasing competition. Google’s Gemini is trying to increase its offerings for the enterprise market, where rival Anthropic is ahead.

OpenAI estimates its total revenue for 2030 will be more than $280 billion, with almost equal contributions from consumer and enterprise businesses, said the sources, who asked not to be named because the information is confidential.

OpenAI’s latest round marks the largest private financing in history and marks a new high for late-stage tech company valuations. OpenAI first broke the record last year with a $40 billion fundraising led by Softbank. Rival Anthropic had the next highest raise, raising $30 billion in its latest round, while xAI most recently raised $20 billion.

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