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The largest VC round that ever happened 🚀

Last week, OpenAI made headlines by raising a staggering $6.6 billion at a post-money valuation of $157 billion. This new round breaks the previous record set earlier this year when xAI raised $6 billion.

Thrive Capital led this round with a $1.3 billion contribution, joining forces with heavyweights like Microsoft, Nvidia, SoftBank, Ark, and Fidelity. During negotiations, OpenAI set a minimum entry point of $250 million for participation and encouraged investors to steer clear of funding its competitors, including Anthropic, xAI, SSI, Perplexity, and Glean.

With this latest influx of capital, OpenAI aims to “double down on leadership in frontier AI research, ramp up computing capacity, and continue building tools to tackle tough problems.”

So, how did OpenAI transform from a startup founded just nine years ago into the world’s largest VC-funded company?

Here’s a timeline of its key milestones:

• December 2015: Sam Altman, Elon Musk, Ilya Sutskever, Greg Brockman (ex-Stripe CTO), Andrej Karpathy, Wojciech Zaremba, and other tech luminaries established OpenAI to ensure that AI benefits all of humanity. The organization started as a non-profit dedicated to open collaboration and transparency, with members committing over $1 billion to its mission.

• 2016: OpenAI launched a platform for reinforcement learning suitable for everyone from beginners to advanced researchers, along with Universe, a tool for AI evaluation across various applications.

• 2018: OpenAI unveiled GPT-1, the first model in its Generative Pre-trained Transformer series, marking significant advancements in natural language processing. That same year, Musk stepped down from the board due to potential conflicts with Tesla’s AI initiatives but remained a donor. As Musk had only contributed $100 million of his promised $1 billion, OpenAI transitioned to a hybrid non-profit/for-profit model to attract additional funding.

• 2019: OpenAI released GPT-2 and adopted a “capped-profit” model to draw in more investors and continue its mission.

• 2020: OpenAI debuted GPT-3, which gained widespread attention for its ability to generate human-like text, boasting over 175 billion parameters trained on extensive internet datasets. The same year, Codex, trained on billions of lines of code, powered GitHub Copilot.

• 2022: OpenAI launched ChatGPT, a model powered by GPT-3, becoming one of the fastest-growing applications in history, with 100 million users in just two months.

• Today: OpenAI is now focused on its newest model, GPT-4, estimated to have over 1 trillion parameters, and GPT-4o, which processes and generates output across text, audio, images, and video in real-time.

While product development has been smooth, the company's internal dynamics have been turbulent. Sam Altman has remained a constant since 2015, but last year he was fired for “not being consistently candid” with the board, only to be rehired days later, leading to a board overhaul.

In the wake of this upheaval, several key team members departed. Mira Murati, CTO for six years, has not announced future plans; Ilya Sutskever, co-founder and chief scientist, left to establish SSI, a company focused on AI safety. Other co-founders, John Schulman and Durk Kingma, joined competitor Anthropic, while Greg Brockman, another co-founder and President, is currently on sabbatical after nine years at OpenAI.

As we look toward the future, Sam Altman’s latest essay suggests we are only thousands of days away from the age of superintelligence.

With powerful models, enhanced infrastructure, ample VC funding, and a mission to ensure AI benefits everyone, OpenAI continues to be a startup in progress, likely destined for business textbooks for future generations.

STARTUP NEWS RADAR 📡

_{What’s happening these days?}

• Meta has premiered Movie Gen, an advanced AI video generation tool that allows users to create and edit videos using text prompts. While the tool is not yet publicly available, it can produce videos of up to 16 seconds in length. [source]

• October, also known as Mental Health Awareness Month, inspires a webinar dedicated to the anxiety that comes with evolving professional roles and work experience, especially in the context of entrepreneurship. Check out more details and tune in if you're interested. [source]

• The WordPress vs. WP Engine drama explained in a chronological way here.

• Uber plans to launch a GPT-4-powered assistant in early 2025 to help drivers transition to electric vehicles, supporting the company's mission to boost EV adoption across North America and Europe. [source]

• GrowBiz is hosting the 'From Startup to Successful Business' one-day event on October 17 in Skopje. [source]

THE STARTUP VAULT 🗃️

_{Founders take note:}

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Run Rate is the extrapolated financial performance of a startup based on current revenue and expense levels.

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