OpenAI completes deal that values company at $300 billion

OpenAI said Monday that it had completed a $40 billion fundraising deal that nearly doubles the high-profile company's valuation from just six months ago.

The new fundraising round, led by Japanese conglomerate SoftBank, values OpenAI at $300 billion, making it one of the most valuable private companies in the world, along with rocket company SpaceX and ByteDance, the maker of TikTok.

OpenAI started the artificial intelligence boom in late 2022 with the release of its online chatbot, ChatGPT. Its latest investment round indicates that the tech industry's excitement over AI remains strong, even amid concerns about the effectiveness and safety of the rapidly improving technology.

"This investment helps us push the frontier and make AI more useful in everyday life," Sam Altman, OpenAI's CEO, said in a statement to The New York Times.

The company also said that 500 million people are actively using ChatGPT each week -- up from 400 million in late February -- and that 20 million people are paying to use more advanced versions of the chatbot.

The new investment will be made in two parts, according to a person familiar with the deal who spoke on the condition of anonymity. An initial $10 billion will arrive immediately, with another $30 billion arriving by the end of the year, the person said.

SoftBank Group is providing 75% of the total, with the rest coming from other investors, including Microsoft, Thrive Capital, Coatue and Altimeter, the person said. Microsoft and Thrive Capital led previous investment rounds in OpenAI.

Altman helped create OpenAI as a nonprofit in 2015, along with Tesla CEO Elon Musk, and several others. In 2018, after Musk left the organization following a battle for control, Altman attached OpenAI to a for-profit company so he could raise the billions of dollars needed to build artificial intelligence technologies.

But the nonprofit retained control of the company. Last year, Altman and his company began working on a plan to shift control of the company from the nonprofit to OpenAI's investors as a for-profit company.

Soon after, Musk sued OpenAI and Altman, claiming they had breached the company's founding contract by putting commercial interests ahead of the public good.

OpenAI plans to move control of the company to a public benefit corporation, or PBC, which is a for-profit corporation designed to create public and social good. If this shift is not completed by the end of the year, SoftBank will have the option to reduce its total contribution to $20 billion, said a person familiar with the latest investment deal.

Musk and a consortium of investors escalated his long-standing feud with Altman this year by offering to buy for more than $97 billion the assets of the nonprofit that controls OpenAI. OpenAI's board of directors rejected the bid.

But the bid could still complicate Altman's efforts to separate the company from the nonprofit board and raise the billions of dollars that OpenAI needs to build new technologies.

(The Times has sued OpenAI and its partner, Microsoft, claiming copyright infringement of news content related to AI systems. The two companies have denied the suit's claims.)