OpenAI bags $110B at $730B pre-money valuation

ChatGPT maker OpenAI has secured a staggering $110 billion in new investment at a pre-money valuation of $730 billion.

The funding round was led by major strategic partners including Amazon, which is investing $50 billion, alongside SoftBank and NVIDIA, who are each contributing $30 billion.

“Amazon will also invest $50 billion in OpenAI, starting with an initial $15 billion investment and followed by another $35 billion in the coming months when certain conditions are met,” OpenAI clarified.

The Sam Altman-led firm noted that additional financial investors are expected to join as the funding round progresses. Prior to this round, OpenAI had raised more than $64 billion.

These partnerships are designed to provide the necessary capital, distribution, and computing power to meet the surging global demand for advanced AI services.

The financial scale of these agreements also has an impact on the non-profit wing of the organisation. The new valuation increases the value of the OpenAI Foundation stake to over $180 billion, making it one of the most well-resourced non-profit entities in history.

This wealth will be used to fund philanthropic efforts in critical areas such as health breakthroughs and building resilience against the potential risks of AI.

“We are pushing the frontier across infrastructure, research, and products to make AI more capable, reliable, and broadly useful. SoftBank, NVIDIA, and Amazon are long-term partners who share our ambition to turn real scientific progress into systems that deliver meaningful benefits for people at global scale,” said Sam Altman, Co-founder and Chief Executive Officer of OpenAI.

To support this massive growth, OpenAI is expanding its technical infrastructure. The organisation is deepening its relationship with Amazon Web Services (AWS), through an agreement that will see an additional $100 billion spent over the next eight years.

A key part of this expansion involves the use of 2 gigawatts of Trainium capacity. Trainium is a category of high-performance computer chips designed by Amazon specifically to train large AI models more efficiently.

Simultaneously, OpenAI is increasing its collaboration with NVIDIA to utilise its Vera Rubin systems. This includes 3 gigawatts of dedicated capacity for inference, which is the process where an AI model applies what it has learned to provide an answer to a user, and 2 gigawatts for training.

These investments in physical hardware and energy capacity are essential for lowering the costs of producing intelligence and ensuring that the systems can handle the needs of millions of users at once.

Meanwhile, OpenAI and Amazon are co-creating a Stateful Runtime Environment that will be available on the Amazon Bedrock platform. A stateful environment allows an AI model to maintain context and remember previous work across different tools and data sources, rather than treating every interaction as a completely new start. This makes the AI much more effective for complex, ongoing projects in a business setting.

Furthermore, AWS will become the exclusive third-party provider for a platform called OpenAI Frontier. This system is built to help large organisations create and manage teams of AI agents that can operate across various business systems with shared context and built-in security.

“OpenAI and Amazon share a belief that AI should show up in ways that are practical and genuinely useful for people. Combining OpenAI’s intelligence with Amazon’s infrastructure and global reach helps us put powerful AI into the hands of businesses and users at real scale,” Altman noted.

The partnership with Amazon will also result in the development of customized AI models specifically for Amazon’s own customer-facing applications.

ChatGPT has already achieved a massive scale with more than 900 million weekly active users and over 50 million paying consumer subscribers. Other tools like Codex, which helps individuals write and automate software code, have seen their weekly user base triple to 1.6 million people since the start of the year, according to OpenAI.

Earlier this month, Anthropic, the AI research firm behind the Claude models, raised $30 billion in a Series G funding round, taking its post-money valuation to $380 billion.