Thrive Capital is investing more than $1 billion in OpenAI’s current $6.5 billion fundraising round, and it has a sweetener that other investors aren’t getting: if the AI firm hits revenue targets, next year There is potential to invest $1 billion at the same valuation, people familiar with the matter said on Friday.
OpenAI expects its revenue to grow from an estimated $3.7 billion in 2024 to $11.6 billion next year, the sources said on condition of anonymity. One of the sources said losses are expected to reach $5 billion this year, largely depending on their spending for computing power, which could change.
The current funding round, which comes in the form of convertible debt, is expected to close by the end of next week and could value OpenAI at $150 billion, maintaining its position as one of the world’s most valuable private companies. Will strengthen.
That valuation depends on finishing a complex restructuring to remove control of its nonprofit board and remove limits on investment returns for investors, a plan first reported by Reuters. There is no specific time frame when the conversion can be completed.
Thrive Capital, which also led OpenAI’s previous funding round, is offering $1.2 billion from a combination of its own funds and a special purpose vehicle for small investors. Other investors in the new round include Microsoft, Apple, Nvidia and Khosla Ventures.
Others were not given the option to invest in the future at the current price, sources said. OpenAI’s valuation has risen sharply, and if that continues, Thrive could pick up its stake at a discounted price next year.
Reuters was not able to determine the revenue targets associated with Thrive Options, which was founded by Joshua Kushner.
Thrive and OpenAI declined to comment.
OpenAI’s revenue expectations far exceed CEO Sam Altman’s earlier estimate of $1 billion in revenue this year. The main revenue sources are the sale of its services to corporations and subscriptions to its chatbot.
Its flagship product ChatGPT is expected to generate revenues of $2.7 billion this year, up from $700 million in 2023. The chatbot service, which charges $20 per month, has about 10 million paying users.
Financial statements and details about Thrive’s additional option were first reported by The New York Times on Friday.
© Thomson Reuters 2024
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