OpenAI has closed a historic $40 billion funding round, marking the largest private tech investment ever recorded. The deal, led by SoftBank with a $30 billion commitment, values the ChatGPT maker at $300 billion, placing it among the world’s most valuable private companies alongside SpaceX ($350 billion) and ByteDance.
The investment syndicate includes Microsoft, Coatue, Altimeter, and Thrive Capital. According to CNBC, approximately $18 billion will fund OpenAI’s commitment to Stargate, a joint venture with SoftBank and Oracle announced by President Trump in January.
The funding comes with significant conditions. SoftBank disclosed that its investment could decrease to as low as $20 billion if OpenAI fails to restructure into a for-profit entity by December 31. This conversion would require approval from Microsoft and California’s attorney general, and faces a legal challenge from Elon Musk, one of OpenAI’s original co-founders.
Explosive user growth
OpenAI’s user base continues to expand at a remarkable pace. The company now reports 500 million weekly ChatGPT users, up from 400 million just last month. In a striking comparison, CEO Sam Altman noted on X (formerly Twitter) that while the initial ChatGPT launch took five days to reach one million users, the platform now adds that many users in a single hour.
This surge in popularity coincides with major updates to OpenAI’s image generation technology, which has attracted widespread consumer interest. The company temporarily restricted free users’ access to this feature due to overwhelming server demand but has since restored the service.
OpenAI expects its revenue to triple to $12.7 billion by the end of this year.
Strategic implications for enterprise AI
The massive capital infusion strengthens OpenAI’s position in the increasingly competitive enterprise AI market, where it faces rivals like Google, AWS, Anthropic, and Elon Musk’s xAI.
Research firm Gartner projects that company spending on generative AI will reach $644 billion this year, a 76% increase from 2023. This explosive growth explains the race among major technology companies to secure market share.
In a significant strategic shift, OpenAI announced plans to launch an open-weights reasoning model that developers can run on their own hardware. This represents a departure from the company’s cloud subscription model that has driven its revenue so far.
Despite currently operating at a loss, OpenAI projects it will break even by 2029 before moving into profitability.
Sources: CNBC, VentureBeat