Thrive Capital is committing more than $1 billion of OpenAI’s current $6.5 billion fundraising round, and it has a sweetener no other investors are getting: the potential to invest another $1 billion next year at the same valuation if the AI firm hits a revenue goal, people familiar with the matter said on Friday.
Revenue is expected to balloon to $11.6 billion next year from an estimated $3.7 billion in 2024, the sources said, speaking on condition of anonymity. Losses are expected to be as high as $5 billion this year, they said. Spending largely depends on their computing power that can change, one source added.
The current funding round, in the form of convertible debt this time, is expected to close by next week’s end and will value OpenAI at $150 billion, making it one of the world’s most valuable private companies.
Such valuation depends on successfully pulling off a complex restructuring to remove the control of its not-for-profit board and also eliminate cap on the return to investors, a plan first reported by Reuters. There is no specific timeline when the conversion could be completed.
Thrive Capital, which co-led OpenAI’s last round of funding, is committing $1.2 billion in its own fund and a special purpose vehicle to stretch the dollars with smaller investors. Other backers of the new round include Microsoft, Apple, Nvidia, and Khosla Ventures.
Sources said the others were given no option for future investment at that price. OpenAI’s valuation has shot up, and if it keeps on rising, Thrive may end doling out increases in its stake next year at a discounted price.
Reuters could not determine the revenue target attached to the option for Thrive, which was founded by Joshua Kushner.
Thrive and OpenAI did not comment.
OpenAI’s revenue is projected to be much higher than CEO Sam Altman said on Bloomberg last year: $1 billion in revenue this year. Major sources of revenue include sales of its services to corporations and subscriptions to the company’s chatbot.
Its most popular offering, ChatGPT, the chat service with a monthly charge of $20, should yield $2.7 billion in revenue for this year, jumping from $700 million in 2023. The chat service has about 10 million subscribers.
New York Times first reported the financials and details about Thrive’s additional option on Friday.
Bhupendra Singh Chundawat is a seasoned technology journalist with over 22 years of experience in the media industry. He specializes in covering the global technology landscape, with a deep focus on manufacturing trends and the geopolitical impact on tech companies. Currently serving as the Editor at Udaipur Kiran, his insights are shaped by decades of hands-on reporting and editorial leadership in the fast-evolving world of technology.