OpenAI has a $4 billion revolving credit facility, bringing its total liquidity to more than $10 billion, CNBC has learned. It follows news on Wednesday that OpenAI closed its latest round of funding at a $157 billion valuation, including $6.6 billion the company raised from a broad list of investment firms and big tech companies.
JPMorgan Chase, Citi, Goldman Sachs, Morgan Stanley, Santander, Wells Fargo, SMBC, UBS and HSBC all participated.
The base credit line is $4 billion, with an option to increase it by an additional $2 billion. The loan is unsecured and can be used for three years. OpenAI’s interest rate is equal to the Secured Overnight Funding Rate (SOFR) plus 100 basis points. SOFR, a measure of the cost of borrowing cash overnight, dropped to just over 5% earlier this week, meaning OpenAI would pay roughly 6% on the money it borrows immediately.
“This means we now have access to over $10 billion in liquidity, which gives us the flexibility to invest in new initiatives and operate with full agility as we scale,” OpenAI wrote in a blog post on Thursday, adding that the company plans to use the money to invest in research and products, expand infrastructure and attract talent. “It also reaffirms our partnership with an incredible group of financial institutions, many of whom are also OpenAI customers.”
OpenAI’s latest funding round included an extensive list of investment firms and large technology companies. Led by Thrive Capital, which planned to invest $1 billion, investors included existing backer Microsoft as well as chip maker Nvidia. SoftBank, Khosla Ventures, Altimeter Capital, Fidelity Management & Research Company, MGX and Tiger Global also participated, according to sources familiar with the situation.
The rapid rise of OpenAI, which began with the launch of ChatGPT in late 2022, has been the biggest story in the tech industry over the past two years, bringing the concept of generative artificial intelligence into the mainstream and paving the way for tens of billions of dollars. of investments in AI infrastructure. Earlier this year, OpenAI was valued at a reported $80 billion, up from $29 billion in 2023.
OpenAI generated $300 million in revenue last month, up 1,700% since the start of last year, CNBC confirmed last week, following a report by The New York Times. The company expects to bring in $11.6 billion in sales next year, up from $3.7 billion in 2024, according to a person close to OpenAI who asked not to be named because the financials are confidential.
But all this revenue is extremely expensive, as OpenAI must increase purchases of Nvidia’s graphics processing units (GPUs) to train and run its large language models. The company expects to lose about $5 billion this year, the person said. Microsoft has invested billions of dollars in OpenAI and is a key partner as the software giant strengthens its Azure cloud business.
OpenAI has also experienced a lot of growing pains in recent months, including the loss of top executives, a trend that continued last week with the departures of CTO Mira Murati, chief research officer Bob McGrew and VP of Research Barret Zoph.
OpenAI held a meeting last Thursday after the board’s decision to consider restructuring the company into a for-profit business, according to a person with knowledge of the matter, who said that if the change happens, the nonprofit segment would remain as an entity. special.
At that meeting, Altman denied reports of plans for him to take a “giant equity stake” in the company, calling that information “simply not true,” according to a person who was present.
OpenAI chairman Bret Taylor told CNBC in a statement last week that while the board has talked about the issue, there are no specific numbers on the table.
“The board has had discussions about whether it would be beneficial to the company and our mission for Sam to be compensated in equity, but no specific figure has been discussed nor has a decision been made,” Taylor said.