By Krystal Hu and Kenrick Cai
(Reuters) – Thrive Capital is investing more than $1 billion from OpenAI’s current $6.5 billion fundraising round, and it comes with a sweetie that no other investor gets: the potential to invest another $1 billion next year at the same valuation as the AI company takes a hit. revenue target, people familiar with the matter said Friday.
OpenAI predicts revenue will skyrocket to $11.6 billion next year, up from an estimated $3.7 billion in 2024, the sources said, speaking on condition of anonymity. Losses are expected to be as much as $5 billion this year, depending largely on their spending on computing power, which could change, one of the sources said.
The current funding round, which comes in the form of convertible debt, is expected to close late next week and could value OpenAI at $150 billion, cementing OpenAI’s status as one of the most valuable private companies in the world.
That valuation depends on implementing a complex restructuring to take away control of the nonprofit’s board and also eliminate caps on investment returns for investors, a plan first reported by Reuters. There is no specific timeline on when the conversion could be completed.
Thrive Capital, which also led OpenAI’s previous funding round, is offering $1.2 billion from a combination of its own fund and a dedicated fund for smaller investors. Other investors in the new round include Microsoft, Apple, Nvidia and Khosla Ventures.
The others were not given the option for future investments at the current price, sources said. OpenAI’s valuation has risen rapidly, and if it continues to do so, Thrive could increase its stake at a discounted price next year.
Reuters could not determine the revenue target associated with the option for Thrive, founded by Joshua Kushner.
Thrive and OpenAI declined to comment.
OpenAI’s revenue expectations easily exceed CEO Sam Altman’s previous projection of $1 billion in revenue this year. The main sources of income are the sale of services to companies and subscriptions to the chatbot.
Its flagship product, ChatGPT, is expected to generate $2.7 billion in revenue this year, up from $700 million in 2023. The chatbot service, which charges $20 every month, has about 10 million paying users.
The financials and details of Thrive’s additional option were first reported by the New York Times on Friday.
(Reporting by Krystal Hu and Kenrick Cai in San Fransico; Editing by Will Dunham)
