‘$2bn monthly revenues’, OpenAI now values $850 bn after raising $122 bn

OpenAI, the company behind one of the largest language model ChatGPT, has raised $122 billion in its latest funding round. This marks an increase from the $110 billion figure the company announced in February.

The round was co-led by SoftBank, alongside major investors such as Andreessen Horowitz and D. E. Shaw Ventures, OpenAI said, marking one of the largest funding rounds ever for an AI company. This investment reflects strong investor confidence in the future of artificial intelligence.

“Within a year of launching ChatGPT, we reached $1B in revenue. By the end of 2024 we were generating $1B per quarter. We are now generating $2B in revenue per month. At this stage, we are growing revenue four times faster than the companies who defined the Internet and mobile eras, including Alphabet and Meta,” OpenAI said in a statement.

Where will OpenAI direct this capital?

This latest funding round has pushed OpenAI’s valuation close to $850 billion. Several major technology companies and investors have backed the firm, signaling strong belief in its growth potential.

The company plans to use most of this capital to strengthen its infrastructure. This includes investing in data centers and advanced AI chips, which are essential for training and running AI models. As AI systems become more complex, the cost of maintaining them continues to rise, making such investments critical.

Preparing for a stock market debut

One of the biggest takeaways from this funding round is that OpenAI appears to be preparing for an initial public offering (IPO). In simple terms, this means the company could soon offer its shares to the public through the stock market.

Reports suggest that OpenAI may target a valuation of over $1 trillion when it goes public. If achieved, this would make it one of the largest IPOs in history. The company has already taken early steps in this direction by allowing limited access to its shares through private investments.

Concerns about profitability

Despite raising such a large amount of capital, OpenAI is not yet consistently profitable. While the company generates billions in revenue, its expenses remain extremely high. Running AI systems requires massive computing power, which comes at a significant cost.

However, the company continues to burn cash, and experts believe it may face losses for the next few years. Before going public, OpenAI may need to present a clearer roadmap toward long-term profitability.

Conclusion

With this massive funding round, OpenAI CEO Sam Altman is likely to face increasing pressure to justify the company’s valuation, especially as it moves closer to a potential IPO.

The company has already begun cutting back on certain expenses and has reportedly shut down some projects, including its short-form video initiative, Sora, in an effort to control costs.

This funding round highlights a broader shift in the tech industry. Artificial intelligence is no longer just an emerging trend it has become a central focus for investment. Companies and investors are now competing aggressively to lead in this rapidly evolving space.