OpenAI closes $175M fund to support AI startups

ChatGPT creator OpenAI has raised over $175 million for an investment fund aimed at backing startups working on AI. 

The US-based AI research firm closed the investment into OpenAI Startup Fund I, which is backed by 14 investors, including big tech companies such as Softbank and Microsoft. 

While the Sam Altman-led firm earlier this year said that it targeted the close at $100 million, the investment fund closed 75% higher, as per The Information citing a US Securities and Exchange Commission (SEC) filing. 

The fund is managed by Altman and OpenAI’s COO Brad Lightcap. 

The creator behind ChatGPT, a generative AI chatbot that uses natural language processing to assist users to write essays, codes, emails, etc, has been investing in the AI ecosystem to support early-stage AI startups. Last year, it led Series C investment in Descript which is developing an algorithm-driven video-editing tool. 

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OpenAI is also on a fundraising spree. The Microsoft-backed firm’s valuation shot up to $27 billion - $29 billion after raising $300 million through a share sale, finding new backers in Sequoia Capital, Andreessen Horowitz etc. 

According to reports, founder Altman has privately stated that OpenAI may grab investments as big as $100 billion in the coming years to develop artificial general intelligence to improve its AI capabilities.

Altman, along with other luminaries like ‘the godfather of AI’ Geoffrey Hinton, who recently resigned from Google, has been warning about the unchecked development of AI systems and the need for government regulation as the technology threatens to replace professional experts "in most domains".

There has been a significant boost in AI investments in India as well. According to a report by Traxcn, a VC analytics firm, funding in AI startups jumped from $1.7 billion in 2020 to around $5.2 billion last year.