San Francisco (United States) (AFP) – OpenAI announced Friday a massive $110 billion funding round valuing the ChatGPT maker at $730 billion, with SoftBank, Nvidia, and Amazon each making multi-billion-dollar commitments as the artificial intelligence company races to meet surging global demand. The investment round — one of the largest in Silicon Valley history — includes $30 billion from Japanese conglomerate SoftBank, $30 billion from chip giant Nvidia, and up to $50 billion from Amazon, with additional investors expected to join as the round progresses.
Alongside the capital injection, OpenAI announced strategic partnerships with both Amazon, the world’s biggest cloud company through its AWS division, and Nvidia, whose AI chips remain unparalleled in their capacity for AI training. “SoftBank, Nvidia, and Amazon are long-term partners who share our ambition to turn real scientific progress into systems that deliver meaningful benefits for people at global scale,” OpenAI said in a statement.
The eye-watering level of funding reflects the soaring costs of computing power and comes amid lingering questions about whether OpenAI and other AI companies can generate sufficient revenue to cover those costs. The Amazon investment will begin with $15 billion, followed by another $35 billion in the coming months when certain conditions are met, the companies said. According to reports, these include OpenAI going public or achieving artificial general intelligence, a sometimes ill-defined standard of AI capability that more closely matches human-level ability.
OpenAI and Amazon also struck a deal in which the ChatGPT maker will use two gigawatts of computing capacity powered by Amazon’s in-house Trainium chips. Amazon’s cloud computing rival Microsoft, which did not participate in the funding round, remains a major shareholder of OpenAI and a strategic partner.
In the announcement, OpenAI cited a series of user metrics pointing to a breakneck pace of AI adoption. Even if short of its previous forecasts, ChatGPT now counts more than 900 million weekly active users and over 50 million paying consumer subscribers, with January and February on track to be the platform’s biggest-ever months for new subscriptions, the company said. It added that more than nine million businesses pay to use ChatGPT for workplace tasks, while its Codex software development tool has seen weekly users more than triple since the start of the year to 1.6 million.
The figures are intended to reassure more skeptical investors who have questioned OpenAI’s ability to secure revenue, with user growth for its flagship ChatGPT slowing. The company this month began rolling out advertising for its non-premium users in a bid to bring in more revenue. According to The Information tech news, OpenAI now predicts that it will burn more than twice as much cash through 2030 than previously predicted, spending $665 billion on the costs of running and training its AI.
Competition has ramped up too. Arch-rival Anthropic, founded by former OpenAI employees, continues to gain ground and grab headlines for its well-regarded Claude AI models. Anthropic earlier this year secured a $30 billion funding round. Google’s AI model Gemini has also emerged as a potent competitor, with Elon Musk’s xAI also attracting investment and users.
© 2024 AFP
