OpenAI, the company behind ChatGPT, said its US$40 billion funding round led by Japanese tech investment firm SoftBank Group has been finalised. The “largest funding round of all time”, as per research firm PitchBook, values the company at US$300 billion, nearly double its previous US$157 billion valuation from a funding round in October last year.
In February, Bloomberg reported that the ChatGPT maker was in talks of raising US$40 billion. Last week, it was reported it was close to securing the fund.
The Edge Singapore reported that on Monday, OpenAI CEO Sam Altman said that “hundreds of millions of people use ChatGPT each week”, adding that the new funding round will help the company “make AI more useful in everyday life.”
The company is also planning to complete a corporate restructuring by year-end, giving its for-profit arm more independence from the nonprofit that currently oversees it, according to a source familiar with the matter.
Meanwhile, netizens online called the funding a waste of money and electricity, with one commenter saying, “I just hope this money goes toward making AI safer, more useful, and a little less likely to hallucinate my entire family history.”
SoftBank, which led the funding round, will make an initial investment of US$7.5 billion as part of the deal, with a group of investors contributing an additional US$2.5 billion. A second tranche of US$30 billion, consisting of US$7.5 billion from a syndicate and US$22.5 billion from SoftBank, is anticipated later this year, according to a source.
Sources also said Magnetar Capital, a hedge fund based in Evanston, Illinois, could make a contribution of up to US$1 billion. Other investors mentioned were Coatue Management, Founders Fund, and Altimetre Capital Management.
The Edge Singapore reported that as part of the deal, OpenAI has to complete its restructuring by the end of this year. If the restructuring isn’t done by year-end, SoftBank can reduce its investment from US$30 billion to US$20 billion. OpenAI may then seek additional investors to make up the difference, according to the source.
In a filing on Monday, SoftBank said it will finance its first investment through Mizuho Bank Ltd. and other financial institutions.
SoftBank Chairman Masayoshi Son said its partnership with OpenAI accelerates both companies’ shared vision to unlock AI’s full potential, calling AI a “defining force shaping humanity’s future.” /TISG
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