Crystal Fu, written by Kenrick Cai
(Reuters) – Thrive Capital has invested more than $1 billion of OpenAI’s current $6.5 billion funding round, giving it an allure that other investors don’t have. If the AI company reaches that valuation, it could potentially invest another $1 billion next year at the same valuation. Officials said Friday that revenue targets are achievable.
OpenAI expects its revenue to jump from an estimated $3.7 billion in 2024 to $11.6 billion next year, the people said on condition of anonymity. Losses this year are expected to be up to $5 billion, one of the sources said, adding that this largely depends on spending on computing power and is subject to change.
The current funding round, in the form of a convertible note, is expected to close by the end of next week and could value OpenAI at $150 billion, making it one of the world’s most valuable privately held companies. It is possible to solidify your position.
Its valuation depends on whether it carries out a complex reorganization that would remove control from its nonprofit board and also remove caps on returns to investors, a plan first reported by Reuters. There is no specific timeline for when the conversion will be completed.
Thrive Capital, which also led OpenAI’s previous funding round, is providing $1.2 billion in a combination of proprietary funds and special purpose vehicles for small investors. Other investors in the new round include Microsoft, Apple, Nvidia, and Khosla Ventures.
The remaining companies were not given the option to make future investments at current prices, the people said. OpenAI’s valuation has skyrocketed rapidly, and if things continue at this rate, Thrive may increase its stake next year at a discounted price.
Reuters was unable to determine revenue targets related to options for Thrive, which was founded by Joshua Kushner.
Thrive and OpenAI declined to comment.
OpenAI’s revenue forecast far exceeds CEO Sam Altman’s previous forecast of $1 billion in revenue this year. The main sources of revenue are sales of corporate services and chatbot subscriptions.
The company’s flagship product, ChatGPT, is expected to bring in $2.7 billion in revenue this year, up from $700 million in 2023. The chatbot service, which charges $20 a month, has about 10 million paying users.
Financials and details about Thrive’s additional options were first reported by The New York Times on Friday.
(Reporting by Crystal Fu and Kenrick Cai in San Francisco; Editing by Will Dunham)
