OpenAI has secured $8.3 billion in funding from private equity and venture capital investors as the artificial intelligence group seeks to pave the way for a potential initial public offering (IPO). The ChatGPT maker is raising new funds via its private equity strategies fund, TPG, Fidelity Management, and T Rowe Price.
Dragoneer Investment Group, a San Francisco-based technology-focused fund, has invested $2.8 billion in the round, one of the largest start-up cheques ever written by a single company. The funding values the group at $300 billion, as announced in March.
However, OpenAI’s negotiations with Microsoft are still ongoing, and the company is facing growing competition from rivals like Anthropic. Despite this, OpenAI’s annual recurring revenue has surged to $12 billion, according to a person familiar with its finances.
The new investment is part of a $40 billion funding round announced by OpenAI earlier this year, with SoftBank committed to investing $30 billion. The Japanese group can cut its investment if OpenAI fails to restructure from its non-profit structure to a more conventional for-profit model.
Key investors in the round include Founders Fund, Sequoia Capital, and Andreessen Horowitz, among others. OpenAI is progressing towards a deal with Microsoft, with the companies’ chief financial officers negotiating the terms of their current contract. The negotiations are aimed at rewriting the contract to pave the way for OpenAI’s eventual IPO.
Microsoft is expected to take roughly a third of OpenAI’s equity under the new deal and will retain access to intellectual property until the contract expires in 2030. The companies are still negotiating key issues, including the future of an “AGI clause” that would end Microsoft’s access to new models if OpenAI achieves artificial general intelligence capabilities.
Source: https://www.ft.com/content/76dd6aed-f60e-487b-be1b-e3ec92168c11