OpenAI said Friday it is raising $110 billion in a blockbuster funding round that will value the ChatGate maker at $840 billion, a deal that signals a rapid pace of investment in artificial intelligence.
This is more than double the amount the company raised last year, when it raised $40 billion the biggest Private tech deal on record.
This year’s funding round, which is still open, includes investments of $30 billion from SoftBank, $30 billion from Nvidia and $50 billion from Amazon, and comes ahead of the AI startup’s expected mega-IPO later this year. More investors are expected to join.
“We are extremely excited about this deal,” said Sam Altman, CEO of OpenAI. told cnbc On Friday. “AI is going to be everywhere. It’s changing the entire economy, and the world needs a lot of collective computing power to meet demand.”
Big tech executives have signaled to their investors in recent weeks that they are doubling investments in AI, despite fears that the AI boom could come with huge costs.
The expansion of AI is dependent on the construction of massive datacenters, which are facing scrutiny from lawmakers and communities for increasing energy prices and draining water supplies. AI is also expected to increase unemployment as companies try to replace workers with automated processes.
On Thursday, fintech company Block announced it would lay off 4,000 of its 10,000 employees due to increased AI productivity. The dramatic reduction in the workforce appears to be part of a broader trend, according to Goldman Sachs noted It said in February that AI resulted in 5,000 to 10,000 monthly net job losses last year.
Big tech companies and big tech investors like SoftBank are rushing to form partnerships with OpenAI — which is spending heavily on datacenters — betting that a closer relationship with the company will give them a competitive edge in the AI race.
“We are entering a new phase where frontier AI is moving from research to daily use on a global scale,” OpenAI said in a statement. blog post On Friday. “Leadership will be defined by who can scale up infrastructure fast enough to meet demand, and turn that capacity into products people trust.
ChatGPT now has over 900 million weekly active users and over 50 million consumer customers. OpenAI also highlighted the strength of its products such as Codex, its cloud-based software engineering agent, which is available to paid ChatGPT customers – describing its output as equivalent to that of a “top engineer”. “Weekly Codex users have more than tripled since the beginning of the year, to 1.6 million,” the company wrote. “More people are now building, automating, and shipping software that once required entire engineering teams.”
Amazon will start with an initial $15bn investment, followed by $35bn in the coming months “subject to certain conditions being met”, OpenAI wroteWithout explaining in detail what they were.
As well as the investment, OpenAI and Amazon have also struck a deal in which OpenAI will use two gigawatts of computing capacity powered by Amazon’s in-house Trenium chips, the companies said. “This agreement reduces the costs and improves the efficiency of producing intelligence at scale,” OpenAI said in a statement. statement on friday.
Amazon’s cloud computing platform, AWS, will also be the exclusive third-party cloud provider for OpenAI Frontier, the ChatGPT creator’s enterprise platform for building, deploying, and managing AI agents.
The partnership will not change OpenAI’s existing relationship with Microsoft. The companies said Microsoft Azure still remains the exclusive cloud provider for OpenAI’s API that provides access to OpenAI’s models.
OpenAI’s first-party products will continue to be hosted on Azure, and Microsoft has its own exclusive license and access to the intellectual property in OpenAI models and products.
It was not immediately clear whether Nvidia’s $30 billion investment replaced its previous commitment announced in September, under which Nvidia would invest up to $100 billion in startups.
OpenAI said in its statement that the expansion will strengthen its ability to “train and deploy frontier models globally.” Nvidia CEO Jensen Huang confirmation Their commitment to work with OpenAI came in January in response to reports of tension between the two companies.
