OpenAI Secures $300M in VC Funding at $29B Valuation
OpenAI raises over $300 million from prominent venture capital firms at a valuation between $27 billion and $29 billion, completely separate from Microsoft's earlier $10 billion strategic investment.
OpenAI, the company behind the popular AI model ChatGPT, brings in over $300 million from venture capital firms including Sequoia Capital, Andreessen Horowitz, Thrive, and K2 Global. A source reveals that Founders Fund also participates in this funding round, which values the startup between $27 billion and $29 billion. This financial injection occurs through a tender offer and remains entirely separate from the massive $10 billion strategic investment that Microsoft closes in January.
While Microsoft partners with OpenAI to integrate its technology across various business products, these VC firms enter purely as financial backers. Documents show that investors have already signed term sheets and transferred the funds, with OpenAI's countersignature still pending. Following this transaction, outside investors now own more than 30% of OpenAI, marking a significant shift in the startup's ownership structure.
This investment highlights a notable trend in the current tech landscape, as several major VC firms choose to deploy their "dry powder" into OpenAI despite a broader financial downturn that significantly slows down overall investing pace. PitchBook data indicates that while Sequoia and Andreessen Horowitz are previous backers, Founders Fund, K2 Global, and Thrive are first-time investors in the AI startup. The company initially plans to make this new funding public next week.