According to CNBC, OpenAI has a $4 billion revolving credit facility, bringing its total liquidity to more than $10 billion. News broke on Wednesday that OpenAI completed its latest funding round at a $157 billion valuation, including $6.6 billion the company raised from numerous investment firms and large technology companies.
JPMorgan, Citi, Goldman Sachs, Morgan Stanley, Santander, Wells Fargo, SMBC, UBS and HSBC are among those involved.
The base credit line is $4 billion, with an option for an additional $2 billion. The loan is unsecured and can be tapped within three years. OpenAI’s interest rate is equal to the Secured Overnight Financing Rate (SOFR) plus 100 basis points. SOFR, a measure of how much it costs to borrow money overnight, was just over 5% as of the start of this week, meaning OpenAI will immediately pay about 6% interest on the borrowed funds.
“This means we now have access to over $10 billion in liquidity, giving us the flexibility to invest in new initiatives and operate with full agility as we scale,” OpenAI wrote in a blog post on Thursday. It added that the company plans to use the funds to invest in research and products, expand infrastructure and attract talent. “It also reaffirms our partnership with a distinguished group of financial institutions, many of whom are also OpenAI customers.”
OpenAI’s latest funding round includes a number of investment firms and large tech companies. Thrive Capital plans to invest $1 billion, with investors including existing backer Microsoft and chipmaker Nvidia. SoftBank, Khosla Ventures, Altimeter Capital, Fidelity Management & Research Company, MGX and Tiger Global are also involved, people familiar with the matter said.
OpenAI’s meteoric rise, which began with the launch of ChatGPT in late 2022, became the biggest story in the tech industry over the past few years, bringing the concept of generative artificial intelligence into the mainstream and paving the way for tens of billions of dollars in revenue investment in artificial intelligence infrastructure. . Earlier this year, OpenAI was reported to be valued at $80 billion, up from $29 billion in 2023.
According to the New York Times, CNBC confirmed last week that OpenAI had revenue of $300 million last month, a 1,700% increase since the beginning of last year. According to a person close to OpenAI, the company expects sales to reach $11.6 billion next year, up from $3.7 billion in 2024.
But all this revenue comes at an extremely high cost, as OpenAI must increase its purchases of Nvidia graphics processing units (GPUs) to train and run its large language models. The company expects to lose about $5 billion this year, the person said. Microsoft has invested billions of dollars in OpenAI and is a key partner as the software giant strengthens its Azure cloud business.
OpenAI has also experienced a number of growing pains in recent months, including the loss of key senior executives, a trend that has continued into last year with the departures of Chief Technology Officer Mira Murati, Head of Research Bob McGrew, and Vice President of Research Barret Zoph. week.
OpenAI held an all-hands meeting on Thursday after the board decided to consider reorganizing the company into a for-profit business, according to a person familiar with the matter who said the nonprofit arm would remain a separate entity if the change happened.
At that meeting, Altman denied reports that he planned to acquire a “significant stake” in the company, calling the information “untrue,” according to a person who attended the meeting.
OpenAI chairman Bret Taylor told CNBC in a statement last week that while the board had discussed the matter, there was no specific number.
“The board has discussed whether having Sam receive equity compensation would be beneficial to the company and our mission, but no specific numbers have been discussed and no decision has been made,” Taylor said.
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