February 21, 2024

open artificial intelligenceThe startup behind ChatGPT, a widely used conversational AI model, has raised more than $10.3 billion in a new round of funding, TechCrunch has learned.

Venture capital firms including Tiger Global, Sequoia Capital, Andreessen Horowitz, Thrive and K2 Global participated in the round, according to documents reviewed by TechCrunch. Sources tell us that the Founders Fund is also investing. In total, more than $300 million has been invested in venture capital at a valuation of $27 billion to $29 billion. It’s a big investment Microsoft announced earlier this year, a person familiar with the development told TechCrunch. Microsoft’s investment is believed to be around $10 billion, a figure we’ve confirmed with our sources.

If all of this is accurate, this is the end of the round as reported by the Wall Street Journal Report In the works for January. We confirm that’s when the discussion started, when interest in OpenAI and its business exploded like a virus.

While Microsoft’s investment has a strong strategic angle — the tech giant is working to integrate OpenAI’s technology into multiple areas of its business — venture capital firms are coming in as financial backers.

From what we understand, the term sheet has already been signed by the investors and the funds have been transferred; a countersignature from OpenAI is imminent. The plan is to make the investment public next week.

Currently, outside investors collectively own more than 30% of OpenAI.

According to PitchBook data, Peter Thiel appears to have become a backer, but this appears to be the first investment by Founders Fund; K2 Global is a firm with only one partner, authorization informationand Thrive are also first-time backers of the startup. Sequoia Capital, A16Z, and Tiger Global appear to have been early investors in the company, according to PitchBook data, but they’ve sold their stakes; this latest investment will bring them back.

Many companies, including Tiger and Sequoia, have taken some hits due to the financial crisis in the tech industry last year; in general, many venture capital firms have slowed down their investment significantly, sitting on what is known as a “dry powder” “Waiting for a better climate, maybe a better chance.

So at the moment of the investor Find interesting AI startups to backOpenAI may be seen as an opportunity that looks good right now.

“They’re probably trying to use this (funding) to say, hey look, we found a golden apple,” one source said of the decision to back OpenAI at this point. “Venture capital is a very weird place where anything can happen. You can go from big to broke to big at any point.”

OpenAI has a cross-disciplinary technical team, but the area that has attracted widespread attention recently is GPT, the acronym for Generative Pre-trained Transformer, which is OpenAI’s large language model family for third-party APIs.

There’s also ChatGPT, a GPT-based generative AI service OpenAI will release in late November 2022 that lets anyone type in a natural question and get a convincing, detailed answer. ChatGPT has been a provably trending topic with more than 1 billion visitors to its website in February, says similar sites — and that doesn’t include those who use the technology through third parties.

Generative AI is all the rage right now, but OpenAI is also controversial, with many focusing on the popular ChatGPT product for consumers. People question whether it’s lying, whether it’s a “virus,” how it handles privacy, whether it can be manipulated to be toxic, or commit defamation; as more and more people pour into AI development, even OpenAI’s GPT brand The nature of the long-term “openness” also began to be discussed.

In all fairness, OpenAI has acknowledged that there is still a lot of work to be done, while continuing to develop the service and iterate. In February, the startup launched a paid version of ChatGPT called ChatGPT Plus with a faster user experience. It was upgraded to multimodal LLM GPT-4 in March.

Crucial to the proposal, OpenAI’s valuation, and what investors might be interested in, is the fact that, in addition to the technology, there is a rapidly growing ecosystem around it.

In addition to the hundreds of millions of people who have played ChatGPT, hundreds of businesses, large and small, have started deploying GPT and ChatGPT into their products and services. It has also prompted other big tech companies to accelerate their own efforts to generate artificial intelligence. Google launched Bard, Meta launched camel Undertakes GPT with its proprietary LLM.

However, OpenAI has undeniable appeal over the competition, not least because of its focus on the field of artificial intelligence since its founding in 2015.Even though it has undergone some major changes—including a transition from its original nonprofit model. We don’t real Not sure if AI is going to cause the seismic shift many are claiming, but as one put it: OpenAI may be the closest thing we have to a winner in the field right now.

“We’ve been working on this for a long time, but people are increasingly convinced that it’s really going to work,” co-founder and CEO Sam Altman said at an AI conference earlier this month. “We’ve been[building]the company for seven years. These things take a long time. In general, I’d say why it works and others don’t: it’s just because we’ve been working hard on each for a long time. Details. Most people don’t want to do that.”

In addition to ChatGPT, OpenAI also has an AI-based image generation tool, Dall-E, which received a major update last July. It also has Whisper AI, a speech recognition model.

Microsoft’s efforts include integrating OpenAI’s API with its Azure infrastructure to support the model’s computational needs. It also announced GPT-4 integration in March to enhance Bing, part of Microsoft’s long-running effort to dent the dominance of Google’s search service.

We’ve reached out to the investors mentioned here, as well as OpenAI, for comment and will update this story as we learn more.