What's happened
OpenAI's recent $6.6 billion funding round has positioned it as one of the most valuable startups globally, valued at $157 billion. However, a report indicates the company may not achieve profitability until 2029, with projected losses of $44 billion from 2023 to 2028.
Why it matters
What the papers say
According to Business Insider UK, OpenAI's funding round led by Thrive Capital and supported by Microsoft and Nvidia has made it one of the most valuable startups, valued at $157 billion. However, a report from The Information highlights that OpenAI is not expected to turn a profit until 2029, with projected losses of $44 billion over the next five years. Legal experts, as cited in Business Insider, warn that the transition to a for-profit model could face regulatory hurdles, particularly concerning the nonprofit assets dedicated to charitable purposes. This sentiment is echoed by Martyn Landi in The Independent, who notes that the shift has sparked criticism from some quarters, including co-founder Elon Musk, who argues it strays from OpenAI's original mission.
How we got here
Founded in 2015 as a nonprofit, OpenAI transitioned to a for-profit model in 2019 to attract investment. The recent funding round, the largest in Silicon Valley history, reflects growing interest in generative AI technologies.
Common question
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What Does OpenAI's Recent Funding Mean for Its Future?
OpenAI has recently secured a staggering $6.6 billion in funding, positioning itself as one of the most valuable startups in the world. This significant investment raises questions about the company's future, profitability timeline, and the implications of its projected losses. Below, we explore some of the most pressing questions surrounding OpenAI's financial outlook.
More on these topics
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OpenAI is an artificial intelligence research laboratory consisting of the for-profit corporation OpenAI LP and its parent company, the non-profit OpenAI Inc.
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Microsoft Corporation is an American multinational technology company with headquarters in Redmond, Washington. It develops, manufactures, licenses, supports, and sells computer software, consumer electronics, personal computers, and related services.
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Nvidia Corporation is an American multinational technology company incorporated in Delaware and based in Santa Clara, California.
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Samuel H. Altman is an American entrepreneur, investor, programmer, and blogger. He is the CEO of OpenAI and the former president of Y Combinator.
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Elon Reeve Musk FRS is an engineer, industrial designer, technology entrepreneur and philanthropist. He is the founder, CEO, CTO and chief designer of SpaceX; early investor, CEO and product architect of Tesla, Inc.; founder of The Boring Company; co-foun
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ChatGPT is a prototype artificial intelligence chatbot developed by OpenAI that focuses on usability and dialogue. The chatbot uses a large language model trained with reinforcement learning and is based on the GPT-3.5 architecture.