OpenAI closes $300 million funding round with $27-$29 billion valuation

OpenAI ChatGPT
OpenAI ChatGPT. (Image Credit: Rolf van Root/Unsplash)

OpenAI, the company behind the wildly popular conversational AI model ChatGPT, has picked up new backers, according to media reports.

Prominent VC firms such as Tiger Global, Sequoia Capital, Andreessen Horowitz, Thrive, and K2 Global, and Founders Fund have recently acquired new shares, according to TechCrunch. The total investment made by these VCs is just over $300 million, at a valuation of $27 billion to $29 billion. This investment is separate from Microsoft’s major investment of a staggering $10 billion in the company announced earlier this year.

The company released ChatGPT in November 2022. The AI-powered chatbot reached 100 million monthly in just two months after launch, making it the fastest-growing consumer application in history.

OpenAI, an artificial intelligence (AI) research lab, was founded in 2015 by Elon Musk, Sam Altman, Greg Brockman, and others. Three years after helping found the company, Musk resigned from OpenAI’s board of directors in 2018.

OpenAI and Musk dispute: There have been reports of a public dispute between OpenAI, which is now backed by Microsoft, and its former chairman and Tesla CEO Elon Musk who accused OpenAI of becoming “a closed source, maximum-profit company effectively controlled by Microsoft” in his February tweet.

In early 2018, Elon Musk reportedly expressed concerns that OpenAI had fallen too far behind Google and suggested that he should take control of it. Altman and the other founders refused Musk’s offer, leading to his departure from the company and reneged a significant planned donation. Musk later resigned from OpenAI’s board due to a conflict of interest with AI work at Tesla.

Recent news reports suggested that a month after the launch of ChatGPT, Musk pulled OpenAI’s access to Twitter’s data — a contract that was signed before Musk acquired Twitter. Musk felt that the $2 million OpenAI paid to license the data was not enough.

Despite Musk’s public concerns about the dangers of AI, reports indicate that he has increased his own AI activities and Musk now aims to launch his own AI company called X.AI. He has even proposed creating a chatbot called TruthGPT, “a maximum-truth-seeking A.I. that tries to understand the nature of the universe.”

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