OpenAI has announced a significant new funding round, attracting $6.6 billion at a valuation of $157 billion, making it the largest venture capital round in history, as reported by Axios.
Led by Thrive Capital, this funding round also saw major contributions from tech giants like Nvidia and Microsoft. OpenAI highlighted its success by noting that ChatGPT has surpassed 250 million weekly unique users.
In a brief blog post, the company stated, “The new funding will allow us to double down on our leadership in frontier AI research, increase compute capacity, and continue building tools that help people solve hard problems.”
Skepticism Amidst Growth
Despite the impressive funding, skepticism remains among critics, including tech public relations expert Ed Zitron. His recent newsletter boldly claims, “OpenAI is a bad business,” pointing to a reported $500 million investment from the Softbank Venture Fund, known for backing unsuccessful companies like WeWork. Zitron argues that OpenAI's future as a profitable entity is uncertain, especially given its dependence on individual ChatGPT subscriptions rather than API usage or licensing.
Additional concerns arise from Apple's decision not to invest in OpenAI, particularly following the recent resignation of former chief technology officer Mira Murati. Compounding these worries, The Financial Times reported that OpenAI placed conditions on its investors to refrain from funding rivals, such as Anthropic and Musk’s xAI, indicating a growing apprehension about competition.
Musk openly criticized OpenAI's funding conditions on his X account, labeling the company as "evil."
Intensifying Competition
Competition in the AI sector is heating up. New models, like Liquid AI's Liquid Foundation Models, are emerging, while Google and Anthropic introduce compelling enterprise and consumer solutions. Moreover, Meta and Alibaba are offering powerful open-source models for free.
OpenAI’s Strong Position
Nonetheless, OpenAI’s models consistently lead third-party performance benchmarks. Each time they face competition, the company responds with updates or entirely new models, such as the recent o1 preview series that reclaimed its top position.
With $6.6 billion in fresh funding and a commitment to new models, developer tools, and aggressive cost-cutting measures, OpenAI appears well-positioned for future growth. Its prominence raises questions about its potential for stability and longevity in the AI landscape.
Impact on Developers and Revenue Sharing
For developers leveraging OpenAI's AI models, this influx of capital is likely a promising sign of continued support. However, a key question looms regarding OpenAI’s custom GPT Store, launched in January 2024, which allows ChatGPT Plus users to create and share specific versions of ChatGPT.
At the DevDay developer conference in late 2023, CEO Sam Altman indicated that revenue sharing would be implemented. While some users have reported receiving payment for their GPTs, detailed updates from OpenAI have been scarce since then.
Now, with substantial funding at hand, it's uncertain whether OpenAI will enhance revenue distributions to more GPT creators. I’ve reached out to the company for clarification and will provide updates as they come.
Regardless of internal challenges, OpenAI continues to release new AI products regularly, though anticipation remains high for the public launch of its AI video model, Sora.
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