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.
The company rolled out the Meta AI app in April, putting it in direct competition with OpenAI’s ChatGPT. But the tool has recently garnered some negative publicity and sparked privacy concerns over some of the wacky — and personal — prompts being shared publicly from user accounts.
Besides the mud wrestlers and Trump eating poop, some of the examples CNBC found include a user prompting Meta’s AI tool to generate photos of the character Hello Kitty “tying a rope in a loop hanging from a barn rafter, standing on a stool.” Another user whose prompt was posted publicly asked Meta AI to send what appears to be a veterinarian bill to another person.
“sir, your home address is listed on there,” a user commented on the photo of the veterinarian bill.
Prompts put into the Meta AI tool appear to show up publicly on the app by default, but users can adjust settings on the app to protect their privacy.
Here’s how to do it:
To start, click on your profile photo on the top right corner of the screen and scroll down to data and privacy. Then head to the “suggesting your prompts on other apps” tab. This should include Facebook and Instagram. Once there, click the toggle feature for the apps that you want to keep your prompts from being shared on.
After, go back to the main data and privacy page and click “manage your information.” Select “make all your public prompts visible only to you” and click the “apply to all” function. You can also delete your prompt history there.
Meta has beefed up its recent bets on AI to improve its offerings to compete against megacap peers and leading AI contenders, such as Google and OpenAI. This week the company invested $14 billion in startup Scale AI and tapped its CEO Alexandr Wang to help lead the company’s AI strategy.
The company did not immediately respond to a request for comment.
A One Medical clinic location is pictured in Emeryville, California on February 16, 2024.
Loren Elliott | The Washington Post | Getty Images
For the better part of a decade, Amazon has been trying to carve it’s way into the U.S. health-care market, through billions of dollars worth of acquisitions, big-name hires and high-profile partnerships. It’s been a slog at times, and the company’s long-term strategy hasn’t always been clear.
Following a series of executive departures, Amazon is now restructuring its health business, telling CNBC that Amazon Health Services will be divided into six new units, with a goal of creating a simpler structure.
As part of the effort, the company has tapped a number of longtime Amazon leaders and elevated some One Medical executives to oversee the divisions. Neil Lindsay, senior vice president of Amazon Health Services told CNBC in an interview that the company has been working on the overhaul for the past several months.
“Our leadership team has been focused on simplifying our structure to move faster and continue to innovate effectively,” Lindsay said in a video chat. “One of the problems we’re trying to solve is the fragmented experience for patients and customers that’s common in healthcare.”
Amazon said it hasn’t conducted broad layoffs as part of the changes.
Read more CNBC tech news
The reorganization comes after Amazon lost several senior health leaders in recent months. Dr. Vin Gupta, who joined in 2020 and served as chief medical officer of Amazon Pharmacy, left in February, followed by Trent Green, whose last day as CEO of Amazon’s primary care chain One Medical was in April.
Aaron Martin, vice president of health care at Amazon, announced internally last month that he plans to leave his role. Dr. Sunita Mishra, Amazon’s chief medical officer, also departed in May.
Mishra and Martin’s departures have not been previously reported, and neither responded to requests for comment. Amazon doesn’t plan on naming a new CEO of One Medical following Green’s departure.
Martin, who lives in Nashville, Tennessee, said in a memo to staffers that he’ll remain at Amazon “for a while” to help with the transition.
“I then plan to take some time off this summer and hang out with my wife and my kids, finally get a cover band going in Nashville, and then possibly do something new,” Martin wrote in the memo, which was shared with CNBC.
Ambitious efforts
Amazon has for years been on a mission to crack the multitrillion-dollar U.S. health-care industry, which is notoriously complex and inefficient.
While it had long served providers and others in health care with its cloud-based technology, Amazon’s first big splash directly into the market came in 2018 with the the acquisition of online pharmacy PillPack for about $750 million. Two years later, it launched its own offering called Amazon Pharmacy.
The company then bought One Medical for $3.9 billion in 2023, among its largest acquisitions ever, giving Amazon access to a chain of brick-and-mortar primary care clinics and a robust membership base.
There have been some major setbacks. The company shuttered its telehealth service, Amazon Care, in 2022. That came a year after it disbanded Haven, the joint health-care venture between Amazon, Berkshire Hathaway and JPMorgan Chase. The announcement of Haven in 2018 sent shockwaves through the medical world, pushing down shares of health-care companies on fears about how the combined muscle of leaders in technology and finance could wring costs out of the system.
In the areas where Amazon continues to operate, competition is fierce and, in the case of primary care, margins are very slim.
PillPack founders TJ Parker and Elliot Cohen, who left Amazon in 2022, recently launched a new health-care marketplace called General Medicine that will compete with Amazon. Mishra confirmed to STAT News that she advised the nascent startup. Amazon declined to comment on whether Mishra’s involvement with General Medicine was related to her departure.
Lindsay characterized the recent departures as part of the natural evolution of Amazon’s health business. He added that there’s “no shortage of depth of talent” within his organization.
“We’re a fast-evolving organization because the opportunity is so big,” Lindsay said.
Under its new structure, Amazon Health Services will be focused around the six groups, or what the company calls “pillars.”
One Medical Clinical Care Delivery, led by Dr. Andrew Diamond
One Medical Clinical Operations and Performance, led by Suzanne Hansen
AHS Strategic Growth and Network Development, led by John Singerling
AHS Store, Tech and Marketing, led by Prakash Bulusu
AHS Compliance, led by Kim Otte
AHS Pharmacy Services, led by John Love
Amazon declined to share financial figures for its health business, but Lindsay said it is seeing “very strong growth” across the offerings.
One Medical went public in 2020, and it was still losing money when it was bought by Amazon. At the end of 2022 in its last quarter as a standalone entity, it reported a net loss of $101.1 million on revenue of $272.4 million.
Since joining Amazon, One Medical has been working to open new offices in states including New Jersey, New York and Ohio.
Amazon said in January of 2024 that its pharmacy business “doubled the number of customers” it served in the past year, though it didn’t share specific figures. The company is opening pharmacies in 20 new cities this year, and about 45% of U.S. customers will be eligible for same-day medication delivery.
“If we can make one thing a little bit easier for a lot of people, we’ll save them a lot of time, a lot of money, and some lives,” Lindsay said. “And if we stack these changes up over time, it’ll feel like a reinvention.”
The electric vertical takeoff and landing vehicle, or eVTOL, company said Thursday it plans to use the financing to support new infrastructure and the rollout of an artificial intelligence-based aviation software platform. The money will also support its Launch Edition program, including an official partnership to provide air taxi services during the 2028 Olympics in Los Angeles.
Archer said the funding round included the sale of 85 million shares at $10 apiece and gives the company a pro forma liquidity position of roughly $2 billion.
“We now have the strongest balance sheet in the sector and the resources we need to execute both here in the U.S. and abroad,” said founder and CEO Adam Goldstein in a release. “Archer’s future couldn’t be any brighter.”
The stock offering comes after President Donald Trump recently signed an executive order that created a pilot program to support developing and deploying more eVTOL vehicles in the U.S. Shares of both Archer and competitor Joby Aviation rallied this week on the heels of the news.
Demand for eVTOL companies has ballooned in recent years as developers tout the technology’s ability to reduce emissions and cut down traffic congestion. The technology faces numerous regulatory and safety hurdles in the process.
Archer has already partnered with United Airlines to roll out an airport air taxi service. Last month, competitor Joby Aviation said it received the first $250 million from a $500 million contract with carmaker Toyota to support certifying and producing eVTOLs.
Archer is slated to display its Midnight eVTOL aircraft at the Paris Air Show this month. The United Arab Emirates will be the company’s first launch market.