OpenAI just completed the largest venture capital raise ever.
What happened: OpenAI secured a US$6.6 billion funding round, giving it a $157 billion valuation and the cash necessary to help cover the outrageously expensive costs of training powerful AI models — something the company has already spent ~$7 billion on this year.
- An interesting quirk is that OpenAI asked backers to avoid investing in rival startups. We wonder how Microsoft, a backer who also has several other AI irons in the fire, feels about that.
Why it matters: The raise marks the beginning of a new era for OpenAI. Per documents observed by the New York Times, the funding is contingent on OpenAI becoming a for-profit enterprise within the next two years; otherwise, that fat stack they just got will convert to debt.
- News broke last week that OpenAI is reportedly restructuring to pass control of the business from its non-profit, safety-focused board to its for-profit division.
- The company’s long-time chief technology officer, chief research officer, and research VP all left following the news, continuing a trend of high-profile exits this year.
Bottom line: OpenAI’s rapid ascent to a hundred-billion-dollar behemoth is impressive, but along the way, it has seen the dissolution of its safety team and aforementioned exits over ethical concerns. Its founding principle of building AI with humanity top of mind looks to be a thing of the past, too.—QH