OpenAI, the startup behind the artificial intelligence portal known as ChatGPT, is about to get a massive cash infusion that will pump its valuation beyond $100 billion.
What Happened: Venture capital firm Thrive Capital is leading a fundraising effort and will invest at least $1 billion, according to the Wall Street Journal.
Microsoft Corp MSFT, an original OpenAI investor, is also expected to participate in the round. It remains to be seen what other backers, if any, are joining the campaign.
In 2023, OpenAI was valued at $86 billion.
Why It Matters: OpenAI’s ChatGPT product boasts hundreds of millions of monthly users.
While technically a nonprofit, OpenAI charges its users depending on which GPT tier they use. The GPT-3.5 and the GPT-4o models are free with a registered account. The Plus version, which grants access to GPT-4, costs $20 per month.
The company’s offerings have helped it maintain an edge over big-name rivals, including Alphabet Inc GOOGGOOGL. The Google parent company dumped a $6-billion cash load into Anthropic, an Amazon.com Inc AMZN-backed competitor launched by former OpenAI executives.
Meta Platforms Inc META is also hustling to build its own AI model. The company will likely integrate the tech into Facebook and Instagram.
OpenAI, meanwhile, is working with Apple Inc AAPL to power new AI features for the next generation of iPhones.
What’s Next: Expect the company to continue wrestling with lawsuits. Last month, the Center for Investigative Reporting sued the AI innovator and Microsoft, citing unauthorized use of its content.
Earlier this week, OpenAI insisted that it makes fair use of copyrighted content to teach its language models to create original material.
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