- OpenAI raised $6.6 billion in a deal that values the company at more than $150 billion.
- Investors include Nvidia, Thrive Capital and a UAE-backed investment firm.
- Also among the backers are SoftBank, Tiger and Ark, which have a track record of investing in the top.
OpenAI has officially closed a historic funding round. The company raised $6.6 billion in a deal that valued the company at more than $150 billion and brought in a host of high-profile investors, including Nvidia, Thrive Capital and MGX, an investment firm backed by the United Arab Emirates.
The other firms that participated in the round are less famous for their business acumen and more for being some of Silicon Valley’s most prolific bubble chasers.
Among them was SoftBank, which was famous poured $18.5 billion into WeWorksupporting its co-founder Adam Neuman until the end, even though he left the company in ruins and raised more than 1 billion dollars on his way out.
SoftBank CEO Masayoshi Son, known for his distinctive investment style, is said to have Neumann said that he “wasn’t crazy enough”. SoftBank has a history of big bets that never paid off, such as a robotic pizza-making startup, Zume, that got chewed out. 445 million dollars before bankruptcy. SoftBank’s Vision Fund pa massive loss in 2023 and has recently been selling or writing off assetsthe dismissal of employees and the slowing down of the pace of new investments.
Tiger Global is also one of the firms that OpenAI supported in this latest round of funding. In 2021, the firm led the charge of so-called crossover funds, a group of investors that flooded Silicon Valley with Wall Street moneysparking a deal frenzy and driving startup valuations to unsustainable levels. But the strategy ultimately backfired when valuations fell in 2022, leaving surplus funds and painful loss.
A partner at a top venture capital firm told Business Insider that OpenAI’s “funding looks very 2021,” referring to the VC frenzy from that year that produced a slew of overpriced deals.
Cathie Wood’s Ark Venture Fund is doubling its investment in maker ChatGPT, as first reported by BI. Ark has the humiliating distinction of being i the greatest destroyer of wealth of the last decade, losing more than 14 billion dollars with its moon bets on everything from genomics to cryptocurrencies, according to Morningstar.
You’d be forgiven for wondering if the proven track record of these investors getting to the top is a bad indicator of OpenAI’s ability to grow at its stunning valuation. The company, which two years ago was a relatively unknown research collective, is now worth as much as Goldman Sachs or AT&T.
Conspicuously absent from OpenAI’s list of investors was Apple, which it is said to have reneged on the deal at the 11th hour. This comes just a few months after the two companies announced a partnership with him integrate OpenAI technology on Apple devices. One can’t help but wonder why Apple CEO Tim Cook would be willing to put ChatGPT into the hands of Apple’s billions of users, but not want to invest in the company that makes it.
Cook has developed a reputation in Silicon Valley as a steady and reliable counterweight to Tesla CEO Elon Musk and his ilk. Apple’s involvement in OpenAI’s funding round may have gone a long way toward allaying doubts about OpenAI palace intrigue and general chaotic atmosphere.
A few weeks ago, this funding round was being talked about as the arrival of the adults in the room. Looks like they may have ended up with some wild teenagers.