The borrowing facility will boost its liquidity to $10 billion, OpenAI said, allowing the startup to buy costly computing capacity, including Nvidia chips, in its race with tech giants such as Alphabet-owned Google.
By Reuters October 4, 2024, 12:04:16 AM IST (Published)
OpenAI has secured a new $4 billion revolving credit line, the ChatGPT maker said on Thursday, a day after it closed a $6.6 billion funding round that cemented its position as one of the most valuable private companies in the world.
The borrowing facility will boost its liquidity to $10 billion, OpenAI said, allowing the startup to buy costly computing capacity, including Nvidia chips, in its race with tech giants such as Alphabet-owned Google.
“This credit facility further strengthens our balance sheet and provides flexibility to seize future growth opportunities,” OpenAI’s finance chief Sarah Friar said.
The credit line is with JPMorgan Chase, Citi, Goldman Sachs, Morgan Stanley, Santander, Wells Fargo, SMBC, UBS and HSBC.
The startup at the heart of the generative AI boom on Wednesday raised new funds at a valuation of nearly $157 billion from returning venture capital investors including Thrive Capital and Khosla Ventures.
Its biggest corporate backer Microsoft and new investor Nvidia also joined the funding that came in the form of convertible notes.
The conversion to equity hinges on a successful structural change into a for-profit company and the removal of cap on returns for investors.
The latest funding coincided with executive changes, including the abrupt departure of longtime Chief Technology Officer, Mira Murati, last week.
The personnel changes have not dampened the enthusiasm of most investors, who expect significant growth based on the projections by CEO Sam Altman.
The company is on pace to generate $3.6 billion in revenue this year even as losses surge to more than $5 billion. It expects a major revenue jump next year to $11.6 billion, according to sources familiar with the figures.
OpenAI is also offering Thrive Capital 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, Reuters reported last month.
