Feb 27 (Reuters) – OpenAI said on Friday it is raising $110 billion in a blockbuster funding round that would value the ChatGPT maker at $840 billion, in a deal that signals the feverish pace of investment in artificial intelligence.
The funding round – one of the largest private capital raises on record – includes a $30 billion investment from SoftBank, $30 billion from Nvidia, and $50 billion from Amazon, and comes ahead of the AI startup’s expected mega-IPO later this year.
More investors are expected to join the round as it progresses, OpenAI said.
Big Tech companies and large tech investors such as SoftBank are racing to forge partnerships with OpenAI – which is spending heavily on data centers – betting that closer ties with the company would give them a competitive edge in the AI race.
For OpenAI, the fresh cash will help secure advanced AI chips and the computing capacity that it needs to maintain its pole position in the AI industry, especially as competition heats up from rivals such as Claude chatbot maker Anthropic and Google’s Gemini.
OpenAI is targeting roughly $600 billion in total compute spend through 2030, a source told Reuters last week.
AMAZON PARTNERSHIP
Along with the $50 billion investment, OpenAI and Amazon have also struck a deal in which OpenAI will utilize 2 gigawatts of computing capacity powered by Amazon’s in-house Trainium AI chips.
The companies are also expanding their $38 billion cloud deal signed last year, with OpenAI saying it would spend an additional $100 billion on Amazon Web Services over the next eight years. As well, OpenAI will work with Amazon to develop customized models for the e-commerce giant’s engineering teams.
Amazon will start with an initial $15 billion investment, followed by another $35 billion in the coming months when certain conditions are met, the companies said.
Amazon Web Services will also be the exclusive third-party cloud provider for OpenAI Frontier, the ChatGPT maker’s enterprise platform for building and running AI agents.
The partnership does not change OpenAI’s existing relationship with Microsoft, with Microsoft Azure still remaining the exclusive cloud provider for OpenAI’s APIs that provide access to OpenAI’s models, the companies said.
OpenAI’s first-party products will continue to be hosted on Azure, and Microsoft holds its exclusive license and access to intellectual property across OpenAI models and products.
NVIDIA INVESTMENT RAISES DOUBTS
Nvidia’s investment in OpenAI gives the chip giant a financial stake in one of its largest customers, amplifying the already intertwined relationship between two of the highest-profile players in the AI industry.
It also underscores a growing trend in the tech and AI industry where firms invest in and sign supply deals with each other, raising concerns about “circular” financing deals.
It was not immediately clear whether Nvidia’s $30 billion investment replaced its earlier commitment announced in September under which Nvidia was set to invest up to $100 billion in the startup.
OpenAI and Nvidia did not immediately respond to Reuters’ requests for clarification.
ChatGPT now serves more than 900 million weekly active users, OpenAI said, adding that it has now surpassed 50 million consumer subscribers. January and February are on track to become the largest months for new subscriber additions, it said.
Its AI-assisted coding product, Codex, has also scaled – weekly Codex users have more than tripled since the start of the year to 1.6 million, the company said.
(Reporting by Deborah Sophia in Bengaluru; Editing by Arun Koyyur, Chizu Nomiyama and Nick Zieminski)
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