(Bloomberg) — OpenAI has closed a deal to raise $6.6 billion in new funding, valuing the artificial intelligence company at $157 billion and bolstering its efforts to build the world’s leading generative AI Technology reinforces.

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The funding round was led by Thrive Capital, the venture capital firm led by Josh Kushner, which raised $1.3 billion. Microsoft Corp., OpenAI’s biggest backer, invested about $750 million on top of the $13 billion it had already invested in the startup, according to a person familiar with the matter. Other investors included Khosla Ventures, Fidelity Management & Research Co. and Nvidia Corp., the chipmaker whose powerful processors are at the center of the AI ​​boom. Microsoft declined to comment.

The deal is one of the largest private investments ever, putting OpenAI alongside Elon Musk’s SpaceX and TikTok owner ByteDance Ltd. one of the three largest venture capital-financed startups. The size of the investment underscores the tech industry’s belief in the power of AI and its appetite for the extremely expensive research that drives its progress.

Other investors writing larger checks included Tiger Global Management, which put in $350 million, and Altimeter Capital, which put in at least $250 million, people familiar with the matter say.

Global backers participating in the round included SoftBank Group Corp. and new Abu Dhabi-based technology investment firm MGX. SoftBank’s investment was $500 million, according to one of the people, who asked not to be identified because the information is confidential. The venture capital firm Coatue also took part.

In a statement, the company said it would use the influx of money to advance AI research and increase its computing capacity. “AI is already personalizing learning, accelerating healthcare breakthroughs and increasing productivity,” said Sarah Friar, Chief Financial Officer of OpenAI. “And this is just the beginning.”

OpenAI’s huge valuation has kept Silicon Valley on tenterhooks. “People are shocked at $150 billion,” Altimeter CEO Brad Gerstner said while speaking onstage at the Madrona IA Summit in Seattle on Wednesday. But he also cited reports that the startup aims to generate more than $10 billion in revenue next year – adding that a multiple of 10 times forecast revenue for a company about to go public. is not exorbitant, with Google and Facebook being cited as comparable examples. The latest deal values ​​OpenAI at more than $150 billion in advance, including dollars raised in this round.

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Gerstner also said he hoped OpenAI would go public soon, and that it would be the logical next step for the startup, which he described as “the most important AI company in the United States next to Nvidia.”

As Bloomberg reported, Apple Inc. did not participate in the deal, although the company had previously held investment discussions. The iPhone maker has partnered with OpenAI to integrate ChatGPT on its devices and through its voice assistant Siri. As part of that agreement, Apple was previously in talks to gain an observer role on OpenAI’s board, but those plans were dropped, people familiar with the matter told Bloomberg.

Part of the financing round was invested through so-called special purpose vehicles, in which backers can pool money from a broader group of investors to buy some of the shares. For example, in addition to contributing its own capital, Thrive has set up an SPV to invest in the company, one person said. OpenAI declined to comment on the SPVs.

The funding deal follows a turbulent year for OpenAI. Last November, the company’s board fired and then quickly rehired CEO Sam Altman. In the months that followed, the company reshuffled its board, hired hundreds of new employees and lost several key executives, including co-founder Ilya Sutskever and chief technology officer Mira Murati.

At the same time, OpenAI is considering transitioning from its nonprofit structure — an unusual organization that has frustrated investors — to a for-profit model. The move would appease the company’s supporters but could pose legal hurdles. As part of a transition, OpenAI has discussed giving Altman a stake in the company – a stake that could be worth more than $10 billion, although OpenAI’s board said it hasn’t discussed specific numbers.

OpenAI sparked excitement about the potential of AI in Silicon Valley with the launch of its chatbot ChatGPT in 2022. The tool can generate human-sounding answers to questions and has 250 million weekly active users, the company said. The paid service ChatGPT Plus has 11 million subscribers, one person said. And its business-focused service has more than 1 million users, as Bloomberg has previously reported.

A number of new companies have emerged in recent years to compete with OpenAI, including several founded by former OpenAI employees – such as Anthropic and Safe Superintelligence. OpenAI also faces intense competition from larger technology companies with vast resources, including Google and Amazon.com Inc., which are also developing their own AI models.

In this funding round, OpenAI discouraged investors from backing rival companies such as Anthropic or Musk’s AI startup xAI, according to a person familiar with the matter. Bloomberg previously reported that leading venture capital firm Sequoia Capital, which backed Safe Superintelligence, would not participate in the latest fundraising.

– With assistance from Lizette Chapman.

(Adds more investment details starting in the fourth paragraph.)

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