OpenAI recently closed a record-breaking $122B funding round bringing its valuation to $852B.

OpenAI Group PBC proved it is still the favorite of artificial intelligence investors today, announcing that it has raised $122 billion at a valuation of $852 billion, the largest funding round in Silicon Valley history.

The round, which comes at a time when the company is believed to be preparing for a public offering, will enable it to continue spending heavily on AI chips and data center infrastructure and hiring top talent in the industry.

SoftBank Group Corp. led the round together with Andreessen Horowitz, DE Shaw Ventures, MGX, TPG and T. Rowe Price Associates, says OpenAI. Others, including previous backers such as Amazon.com Inc., Nvidia Corp. and Microsoft Corp., participated in the round. About $3 billion came from individual investors through banking channels, the company said. In addition, OpenAI will now be listed on a number of exchange-traded funds run by ARK Investment Management LLC, which will enable more private investors to gain exposure to its stock ahead of the IPO.

OpenAI will receive additional funding from several international banks as well, after expanding its revolving credit facility to about $4.7 billion, it said. That facility has not yet been used, and is likely to be there to increase the company’s financial flexibility as it increases its spending on infrastructure.

After this round, Chief Executive Officer Sam Altman (pictured) will find himself under more pressure than ever to ensure the company’s large valuation, and he appears to be trying to do so with some of the language used in today’s announcement. A press release provided updates on the company’s latest financials, saying it now generates more than $2 billion a month. “Currently, we are growing revenue four times faster than companies that define the internet and mobile eras, including Alphabet and Meta,” the company said.

OpenAI also provides an update to users. It said it now counts more than 900 million weekly active users of its consumer-based programs. It added that ChatGPT’s search usage has tripled in the past year, pushing it into Google LLC’s territory. In addition, its subscriber base has grown to more than 50 million, and its new ad business is generating more than $100 million in ongoing annual revenue, despite launching six weeks ago. That’s very encouraging, as ads enable the company to monetize its large base of non-paying users, and it’s the same model that generates billions of dollars per quarter for the likes of Google, Amazon, Meta Platforms Inc. and other titans of technology.

The company said it is seeing strong momentum in the business side of its business. It said sales to businesses now account for 40% of total revenue, up from just 30% last year. It is on track to “reach consumer parity by the end of 2026,” the company added.

That’s important information, because OpenAI has made a lot of noise about changing its strategy to target enterprise customers, similar to what its rival Anthropic PBC is doing. The company recently announced plans to create a new “superapp” brand focused on developers and business users, which will integrate ChatGPT with its agent offerings. It also decided to shut down the popular but consumer-focused Sora video production system, in order to focus its investment on tools that allow employees to increase their productivity, especially coding agents.

“AI is driving productivity gains, accelerating scientific discovery and expanding what people and organizations can build,” the company said. “This money gives us the resources to continue earning at the level we need at this time.”

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