The Financial Times revealed new details surrounding OpenAI’s latest funding round, which raised $6.6 billion and valued the company at $157 billion. Uniquely, OpenAI required that participating investors avoid funding competing AI startups, a rare condition in venture capital.
Investor Diversification and Competing Startups
Venture investors typically diversify by backing multiple companies within the same sector. Firms like Sequoia Capital and Andreessen Horowitz have supported both OpenAI and other AI startups such as xAI. However, due to high demand for involvement in this funding round, OpenAI had the leverage to impose non-standard conditions, aiming to limit financial support for its competitors. This list included xAI, founded by Elon Musk, and Safe Superintelligence, started by former OpenAI employee Ilya Sutskever. Other startups like Anthropic, Perplexity, and Glean were also on the restricted list for OpenAI’s investors.
Largest Investors and Valuation Growth
Thrive Capital emerged as the largest investor, contributing $750 million and securing an additional $550 million from smaller investors through a project company. Thrive also committed to investing another $1 billion by next year, using OpenAI’s pre-round valuation of $150 billion as a baseline. Khosla Ventures invested $500 million, according to sources.
OpenAI’s capitalization has surged dramatically, from under $87 billion less than a year ago to five times that amount in April of last year. This rapid growth reflects investors’ confidence in OpenAI’s pioneering role in AI, particularly in generative technologies like chatbots.
CEO Sam Altman’s Role and Future Prospects
CEO Sam Altman was reportedly involved in discussions about his potential stake if OpenAI is restructured as a commercial entity, despite his prior denials, adds NIXSOLUTIONS. With the new funding round, OpenAI has become the largest startup in Silicon Valley, although ByteDance and SpaceX still surpass it in overall valuation. We’ll keep you updated as the company continues to grow.