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OpenAI sees $11.6 billion revenue next year, offers Thrive chance to invest again in 2025
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OpenAI sees $11.6 billion revenue next year, offers Thrive chance to invest again in 2025
Oct 3, 2024 12:14 AM

(Reuters) - Thrive Capital is investing more than $1 billion of OpenAI's current $6.5 billion fundraising round, and it has a sweetener no other investors are getting: the potential to invest another $1 billion next year at the same valuation if the AI firm hits a revenue goal, people familiar with the matter said on Friday.

OpenAI is predicting its revenue will skyrocket to $11.6 billion next year 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 for computing power that could change, one of the sources added.

The current funding round, which comes in the form of convertible debt, is expected to close by the end of next week and could value OpenAI at $150 billion, cementing its status as one of the most valuable private companies in the world.

That valuation depends on pulling off a complicated restructuring to remove the control of its non-profit board and also remove cap on investment return to investors, a plan first reported by Reuters. There is no specific timeline 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 special purpose vehicle for smaller investors. Other investors on the new round include Microsoft, Apple, Nvidia and Khosla Ventures. 

The others were not given the option for future investment at current price, sources said. OpenAI's valuation has soared quickly, and if it continues to do so, Thrive could find itself increasing its stake next year at a discounted price.

Reuters was not able to determine the revenue target associated with the option for Thrive, which was founded by Joshua Kushner.

Thrive and OpenAI declined to comment. 

OpenAI's revenue expectations far exceed CEO Sam Altman's earlier projection of $1 billion in revenue this year. The main revenue sources are sales of its services to corporations and subscriptions to its chatbot.

Its flagship product, ChatGPT, is expected to bring in $2.7 billion in revenue this year, jumping from $700 million in 2023. The chatbot service, which charges a $20 fee every month, has about 10 million paying users. 

The financials and details about Thrive's additional option were first reported by the New York Times on Friday. 

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