Oct 03, V7N- OpenAI has secured $6.6 billion in new funding, bringing its valuation to a staggering $157 billion and reinforcing its leadership in the AI space. This funding round, led by Thrive Capital and backed by major players like SoftBank, Microsoft, Nvidia, and MGX, positions OpenAI as the third-largest venture-backed company globally, after SpaceX and ByteDance. Notably, Apple, which uses OpenAI models for its AI tools, opted not to participate in the funding.

OpenAI, founded in 2015 and led by CEO Sam Altman, plans to use the funds to bolster its AI research, expand computing power, and develop innovative tools like Sora, which can create videos from text prompts. The company gained prominence with the launch of ChatGPT in 2022, followed by GPT-4, the powerful AI model that underpins numerous applications. The latest investment will likely fuel the development of GPT-4's successor.

The AI sector is increasingly seen as transformative, and major tech companies are racing to enhance their generative AI capabilities. The success of companies like Nvidia, which provides crucial components for AI, and the broader enthusiasm for AI, has contributed to significant stock market gains.

OpenAI's rapid growth has also come with challenges, including high costs for computing and talent acquisition. The company has scaled its workforce dramatically and is projected to post losses of $5 billion in 2024 despite expected sales of $3.7 billion in 2023. Meanwhile, OpenAI has imposed exclusivity terms on investors, barring them from supporting rival AI firms like Anthropic and Elon Musk’s xAI.

Internally, OpenAI has undergone leadership and structural changes. CEO Sam Altman, briefly ousted by the board last year, was swiftly reinstated after a backlash from employees and intervention by Microsoft. Recent reports suggest investors are pushing for a reorganization of OpenAI into a more conventional for-profit structure, with Altman expected to gain equity in the company, though he has denied this.

Additionally, OpenAI faces a lawsuit from Elon Musk, an original investor, who claims the company has shifted away from its original non-profit mission since he departed in 2018.

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