OpenAI has closed its long-awaited funding round at a valuation of $157 billion, including the $6.6 billion the company raised from an extensive roster of investment firms and big tech companies.
While OpenAI didn’t name the investors in Wednesday’s press release, a person with knowledge of the matter said the round was led by Thrive Capital and included participation from existing backer Microsoft as well as chipmaker Nvidia, SoftBank and others. Thrive planned to invest $1 billion in the round, CNBC previously reported.
OpenAI’s rapid ascent, which began with the launch of ChatGPT in late 2022, has been the biggest story in the tech industry over the last couple 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.
“The new funding will allow us to double down on our leadership in frontier AI research, increase compute capacity, and continue building tools that help people solve hard problems,” OpenAI wrote in a blog post Wednesday.
OpenAI generated $300 million in revenue last month, up 1,700% since the beginning of last year, CNBC confirmed last week, following reporting 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 that revenue is extremely costly, as OpenAI has to ramp up 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 bolsters its Azure cloud business.
Earlier this year, OpenAI was valued at a reported $80 billion, up from $29 billion in 2023. Following the viral growth of ChatGPT, momentum has continued with new products for businesses and an expansion into AI-generated photos and videos.
OpenAI now has 250 million weekly active users on ChatGPT, CFO Sarah Friar told CNBC in a statement. There are also 11 million ChatGPT Plus subscribers and 1 million paying business users on ChatGPT, a person close to the company said.
“AI is already personalizing learning, accelerating healthcare breakthroughs, and driving productivity,” Friar said in the statement. “And this is just the start.”
OpenAI is experiencing plenty of growing pains along the way, including the loss of key executives, a trend that continued through last week.
Last Wednesday, OpenAI Chief Technology Officer Mira Murati, who briefly served as interim CEO, said she would be leaving after 6½ years. Shortly after that, research chief Bob McGrew and Barret Zoph, a research vice president, said they were leaving the company.
In an interview the next day at Italian Tech Week, OpenAI CEO Sam Altman said, “I think this will be hopefully a great transition for everyone involved and I hope OpenAI will be stronger for it, as we are for all of our transitions.”
Also on Thursday, OpenAI held an all-hands meeting, following the board’s decision to consider restructuring the company to a for-profit business, according to a separate person with knowledge of the matter. Altman said the departures were not related to the potential restructuring, contrary to some media reports.
Should the change occur, the nonprofit segment would remain as a separate entity, the source said.
At Thursday’s meeting, Altman denied reports of plans for him to receive a “giant equity stake” in the company, calling that information “just not true,” according to a person who was in attendance.
OpenAI Chairman Bret Taylor told CNBC in a statement last week that while the board has talked about the matter, no specific figures are on the table.
“The board has had discussions about whether it would be beneficial to the company and our mission to have Sam be compensated with equity, but no specific figures have been discussed nor have any decisions been made,” Taylor said.
The latest funding round also included participation from Khosla Ventures, Altimeter Capital, Fidelity, MGX and Tiger Global, sources told CNBC.
Tesla CEO and X owner Elon Musk gestures behind protective glass during a rally for Republican presidential nominee and former U.S. president Donald Trump, at the site of the July assassination attempt against Trump, in Butler, Pennsylvania, U.S., October 5, 2024.
Carlos Barria | Reuters
Tesla CEO Elon Musk, a meagdonor and adviser to President-elect Donald Trump, is now seeking to influence Germany’s election, posting an endorsement on X of the country’s far-right Alternative for Germany (AfD) party.
In a post Thursday night, Musk wrote, “Only the AfD can save Germany.”
Musk, who has over 200 million listed followers on the site that he owns, made the comment while sharing a post from far-right influencer, Naomi Seibt, who claimed that Germany’s “presumptive next chancellor Friedrich Merz (CDU) is horrified by the idea that Germany should follow Elon Musk’s and Javier Milei’s example,” referring to the president of Argentina.
Seibt has a history of promoting white nationalist ideology, The Guardian previously reported, and has denied the validity of scientific consensus around climate change, namely that it’s driven by fossil fuel emissions.
In a post on X, Sen. Chris Murphy (D-Conn.) called Musk an “out of touch billionaire running the incoming Trump Administration” who “enthusiastically supports the neo-Nazi party in Germany.”
“The AfD’s mission is to rehabilitate the image of the Nazi movement,” Murphy wrote. He added that one of the party’s leaders has a license plate that’s “an open tribute to Hitler,” and another “described Judaism as the ‘inner enemy’ in Germany.”
Musk and Tesla’s investor relations team didn’t immediately respond to requests for comment.
On Friday, German Chancellor Olaf Scholz, a center-left Social Democrat, dismissed Musk’s claim that only the far-right party can “save Germany.”
Under Scholz’s leadership, Germany‘s left-wing coalition collapsed in November, and AfD is currently polling in second place ahead of February elections. Throughout Germany, where the AfD has placed highly in state elections, the other parties have generally refused to form coalitions with it.
Far right parties have also gained ground in the Netherlands, Austria, Finland and elsewhere. Many cheered Trump’s election, which Musk helped finance through $277 million in contributions to the campaign and related Republican causes.
Tesla’s stock is up about 75% since Trump’s victory, surpassing its prior all-time high from 2021 last week.
AfD has reportedly criticized Tesla and its factory outside of Berlin. The party claimed many of Tesla’s thousands of workers there commute in from Poland or Berlin, limiting the economic benefits to the local community in Brandeburg.
The AfD generally views electric vehicles as part of an ideological climate movement, and not good for Germany’s auto industry.
Europe has been a tough market for Tesla this year. According to data from the European Automobile Manufacturers Association, sales of Tesla cars declined 40.9% in November, exceeding the overall 9.5% dip in sales of battery electric vehicles.
Elsewhere in Euopre, Musk endorsed right-wing Italian Prime Minister Giorgia Meloni and has voiced support for Nigel Farage in the U.K, a populist politician and head of Reform UK. In South America, Musk endorsed and has a friendship with Argentina’s President Milei, a self-described anarcho-capitalist.
Bitcoin dipped below the $93,000 mark earlier in the day before trading above that price in volatile trade.
By around 8:26 ET, bitcoin was trading at $93,809.39, according to Coin Metrics, down around 8% from 24 hours before when it was priced above $102,000.
The cryptocurrency hit an all-time high above $108,000 just this week, but has since sold off aggressively.
The Federal Reserve rattled markets in recent days, as it signaled fewer interest rate cuts next year. Equity markets took a hit, filtering through to crypto assets.
The price of bitcoin price has more than doubled this year, supported by a number of factors including the launch of spot exchange-traded funds and the U.S. presidential election of Donald Trump. He has pledged pro-crypto policies and his victory at the polls helped propel bitcoin to its latest record high.
With some markets on edge due to the Fed, some of the steam has come out of assets that have seen big gains this year.
Tesla, which has been another big beneficiary of Trump’s win, continued its post-election slide with shares falling on Friday in premarket trade. Other big names like Nvidia were also lower during the session.
Bitcoin’s fall also dragged down other cryptocurrencies. Ether was down around 12%, and XRP plunged 10% from 24 hours prior, at around 8:27 a.m. ET.
Tesla electric vehicles are parked in a parking lot at the Tesla Gigafactory Berlin-Brandenburg plant.
Patrick Pleul | Picture Alliance | Getty Images
Shares of Tesla continued to slide on Friday, in what appeared to be a case of investors taking profits from the electric car maker’s blistering post-U.S. election rally.
As of around 6:30 a.m. ET, the firm’s shares were down nearly 5% in U.S. premarket trading, extending losses from earlier in the week. On Wednesday, Tesla shares slumped 8% to post their worst day since before Donald Trump’s presidential election victory in November.
Trump’s win prompted a sharp rally in Tesla shares, as investors increased their bets that the electric vehicle firm would benefit thanks to its CEO Elon Musk’s close ties to the president-elect. The stock is still up around 65% since Nov. 5’s market close — the night of the U.S. presidential vote.
Musk was appointed by Trump to co-lead the newly created Department of Government Efficiency, also referred to as “DOGE.” The proposed presidential advisory commission’s acronym shares the same name as the internet meme that inspired so-called “memecoin” cryptocurrency, dogecoin.
Musk was a major backer of Trump during the Republican’s election run, pouring in $277 million primarily into his campaign effort, according to Federal Election Commission filings. Musk is the world’s richest person, with a net worth of $439.4 billion, according to Forbes data.
Last month, Bloomberg News reported Trump’s transition team was planning to pursue a federal framework for regulating self-driving vehicles.
Tesla and Trump’s transition team did not immediately respond to a CNBC request for comment on the report.
If true, the move would offer a major boost to Musk’s EV firm. Tesla is staking its future on the idea of rolling out mass fleets of autonomous vehicles, known as “robotaxi” services. At the firm’s “We Robot” event in October, Musk unveiled the firm’s Cybercab self-driving concept car.
In other Tesla-related news, data released by the European Automobile Manufacturers Association on Thursday showed sales of Tesla cars declined 40.9% in November, exceeding the overall 9.5% dip in sales of battery electric cars (BEVs) in the bloc.
Separately, Tesla also on Friday said it was recalling nearly 700,000 vehicles in the U.S. due to an issue with its tire pressure monitoring system. Software-related recalls aren’t typically a huge issue for Tesla, however, as it can issue “over-the-air” updates to fix these issues.