OpenAI has closed the largest private tech funding round, securing $40 billion and valuing the ChatGPT maker at $300 billion among top private tech firms.
The only private firm with a higher valuation is SpaceX at $350 billion, while OpenAI is now valued equally with ByteDance, the parent company of TikTok, as reported by CB Insights.
The funding round is led by Japan’s SoftBank, which is investing $30 billion, alongside key investors such as Microsoft, Coatue, Altimeter, and Thrive.
Purpose of the funding
In a blog post, OpenAI stated that it intends to use the fresh capital to “push the frontiers of AI research even further” and expand its computing infrastructure.
- CNBC reported that approximately $18 billion of the funds will go to Stargate, OpenAI’s joint venture with SoftBank and Oracle, announced by U.S. President Donald Trump in January.
- While the financing marks a significant milestone, it comes with conditions. SoftBank disclosed that its total investment could be reduced to as low as $20 billion if OpenAI does not restructure into a for-profit entity—allowing unlimited profits to be distributed to investors—by December 31, transitioning from its capped-profit structure (introduced in 2019), where investor profits were limited to a set amount, with any excess reinvested into research.
Prior to OpenAI’s $40 billion raise, the largest private tech funding rounds included Ant Group’s $14 billion raise in 2018, Juul Labs’ $12.8 billion in the same year, and DiDi Global’s $10.8 billion in 2019, according to PitchBook. OpenAI’s own $10 billion round in 2023 had previously been one of the largest in recent years.
User growth and revenue projections
Investors are optimistic about OpenAI’s rapid growth, particularly with the success of ChatGPT. OpenAI reported that ChatGPT now has 500 million weekly users, up from 400 million just last month. The company also expects its revenue to triple to $12.7 billion by the end of 2024.
Sam Altman highlighted ChatGPT’s rapid growth, noting that it gained one million users in five days during its initial launch and another million users within just an hour recently.
“One of the craziest viral moments I’d ever seen, and we added one million users in five days, added one million users in the last hour,” he said.
The AI market is projected to exceed $1 trillion in revenue within a decade. Major technology firms such as Google, Amazon, Anthropic, and Perplexity are ramping up AI innovations, particularly in the race to develop AI agents.
Last week, OpenAI announced leadership changes, with Sam Altman shifting his focus from day-to-day operations to research and product development. Meanwhile, Chief Operating Officer Brad Lightcap will take on an expanded role overseeing the company’s business and daily operations.
