*

Funding, in convertible debt, coming from Thrive Capital,

Khosla

Ventures, Microsoft ( MSFT ) and Nvidia ( NVDA )

*

Altimeter Capital, Fidelity, SoftBank, and MGX also

participated

in the round

*

Thrive Capital committed $1.2 billion with an option for

$1

billion more next year

(Update with funding details in paragraphs 5-6)

By Krystal Hu

Oct 2 (Reuters) - OpenAI, the company behind ChatGPT,

has raised $6.6 billion from investors, which could value the

company at $157 billion and cement its position as one of the

most valuable private companies in the world.

The funding has attracted returning venture capital

investors including Thrive Capital and Khosla Ventures, as well

as OpenAI's biggest corporate backer Microsoft ( MSFT ), and new

participation from Nvidia ( NVDA ).

The closing of the funds coincides with the company's

ongoing restructuring efforts and executive changes, including

the abrupt departure of its longtime Chief Technology Officer,

Mira Murati, last week.

Altimeter Capital, Fidelity, SoftBank, and

Abu Dhabi's state-backed investment firm MGX also participated

in the round.

Thrive Capital, which committed about $1.2 billion from a

combination of its own fund and a special purpose vehicle for

smaller investors, also negotiated the option to invest another

$1 billion next year at the same valuation if the AI firm hits a

revenue goal, sources added.

Apple, which was in talks to invest in OpenAI, did

not end up joining the funding, sources said, who requested

anonymity to discuss private matters.

The funding came in the form of convertible notes, and the

conversion to equity hinges on a successful structural change

into a for-profit that would no longer be controlled by the

non-profit board and the removal of cap on returns for

investors.

The personnel changes haven't deterred enthusiasm from most

investors, who are anticipating significant growth based on the

projections by OpenAI CEO Sam Altman and CFO Sarah Friar.

The company is on pace to generate $3.6 billion in revenue

this year on mounting losses of over $5 billion. It projects

major revenue jump next year to $11.6 billion, according to

sources familiar with the figures.

Investors have also secured some protections as OpenAI

undergoes the complex corporate restructuring that would grant

Altman equity. The talks are still ongoing, and no timeline has

been determined yet.

Investors have negotiated terms that would allow them to

claw back their capital or renegotiate the valuation if the

changes are not implemented within two years, sources said.

OpenAI's meteoric rise in terms of product popularity and

valuation has captured the world's imagination. Since the launch

of ChatGPT, it has attracted 250 million weekly active users.

The company's valuation has also risen from $14 billion in 2021

to $157 billion as it grew revenue from zero to $3.6 billion,

far exceeding Altman's own projections at the time.

The company has told investors it is still actively pursuing

artificial general intelligence (AGI), meaning developing AI

systems that surpass human intelligence, as it ramps up

commercialization and tries to be profitable.