What you need to know
- OpenAI received $6.6 billion in investment recently, including backing by Microsoft and NVIDIA.
- The AI company asked investors to not fund competing tech giants, including Anthropic, xAI, Safe Superintelligence (SSI), Perplexity, and Glean.
- Despite reportedly losing billions of dollars this year, OpenAI's most recent valuation sits at $157 billion.
- Much of OpenAI's value is the result of projected future earnings and the company's early dominance in the AI space.
OpenAI raised $6.6 billion from Microsoft, NVIDIA, and other major investors recently, but it appears that money has some strings attached. Interestingly, it is not the companies investing money that have stipulations. Instead, OpenAI "asked" investors to stay away from competing companies, such as Anthropic and Elon Musk's xAI. I place "ask" in quotation marks because according to Financial Times, OpenAI made it clear that the funding arrangement included exclusivity.
Investors often know the inner workings of the companies they invest in, so investors have to be careful when dealing with multiple rivals. But full exclusivity deals are less common. OpenAI appears to have taken things one step further, giving investors a list of organizations to steer clear of. Anthropic, xAI, Safe Superintelligence (SSI), Perplexity, and Glean round out the list of five companies OpenAI does not want its investors to deal with. Notably, SSI was co-founded by Ilya Sutskever, who also co-founded OpenAI.
"We’ll give you allocation but we want you to be involved in a meaningful way in the business so you can’t commit to our competitors," said a source familiar with the deal to Financial Times.
While OpenAI does not want its investors to fund its competition, there is not a binding agreement in place, according to reports.
Microsoft and NVIDIA were part of this funding round, which saw $6.6 billion invested into OpenAI. Apple was reportedly interested in being involved but backed out at the last minute, according to reports.
Following the investment, OpenAI's valuation sat at $157 billion. Much of OpenAI's value is based on its potential to dominate the AI space. The company reportedly lost $5 billion in 2024 and was said to be on the verge of bankruptcy. Like many other tech startups, OpenAI has received investment and funding in the hopes of turning a profit in the future.
OpenAI funding
OpenAI is one of the biggest names in AI, but it's far from the only tech giant in the field. Musk, who is suing OpenAI at the moment, has xAI. NVIDIA debuted its open-source advanced AI model this week. OpenAI needs to continue to improve its models and roll out new features to compete.
With AI dominating headlines and integrating with more and more software suites and workflows, OpenAI is eager to earn the top spot in the category. With operating costs measured in the billions, OpenAI will have to find ways to better monetize its platform. That could include costly subscription fees ofco up to $2,000 per month.
OpenAI CEO Sam Altman has admitted that developing tools like ChatGPT without copyrighted content is impossible. But he also claims that copyright law does not prohibit using copyrighted content to train AI models. Those stances and the actions of OpenAI have led to the company facing several copyright infringement lawsuits.
Altman claims that AI superintelligence could be "a few thousand days" away. Many, including a former OpenAI researcher, claim that OpenAI is not prepared to handle that achievement.
OpenAI will have the backing of Microsoft, NVIDIA, and other major companies to prepare for AGI and to monetize its AI technology.
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