In a turbulent week that saw its Chief Technology Officer, Chief Research Officer and VP of Research announce their departure, OpenAI elected for a more traditional approach- going from a non-for-profit to a for-profit corporation. CEO Sam Altman, will now get equity worth billions, as well as control over OpenAI.
OpenAI has seen an exponential increase in monthly revenue, hitting $300 million - up 1,700% from January 2023. The company expects about 3.7 billion in annual sales this year, forecasts for next year's revenue has reached 11.6 billion.
While this is all encouraging, OpenAI expects a 5 billion dollar loss this year mainly from running services like Chat GPT, this loss does not include paying employee salaries, which could prove to be costly. OpenAI is struggling to get its costs under control, not unlike other high-profile tech start-ups of the last few decades.
OpenAI has been sharing their documents with potential investors for an investment round that could bring in $7 billion and value the company among the highest ever for a private tech company, at $150 billion. Microsoft, the main investor in OpenAI, has pumped more than $13 billion into the San Francisco company. However, OpenAI spends a lot of that money on Microsoft’s cloud computing systems.
In addition Microsoft and Thrive Capital, the lead investor in the new round, OpenAI is in talks with Microsoft, Apple, Nvidia, Tiger Global and MGX, according to experts.
The shift to for-profit could lead to a volatile couple months for the company as well as potentially being the first mark in a leap to the public market.
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