OpenAI Projects $11.6B Revenue for Next Year, Extends Future Investment Opportunity to Thrive!

Thrive Capital is investing more than $1 billion as part of OpenAI’s ongoing $6.5 billion fundraising round.

This investment comes with a unique “sweetener” that no other investors are receiving: the potential for Thrive to invest an additional $1 billion next year at the same valuation if OpenAI meets certain revenue targets.

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This offer gives Thrive a distinct advantage over other investors in the round, such as Microsoft, Apple, Nvidia, and Khosla Ventures, none of whom received the same opportunity for future investment at the current valuation.

OpenAI forecasts a massive revenue surge, with predictions that its revenue will climb to $11.6 billion in 2025, a significant jump from the estimated $3.7 billion in 2024.

The risk to reward must be more than enticing?…
This seems like a no-brainer to someone whose money is not on the line.

— PaulGodsmark (@PaulGodsmark) September 27, 2024

These projections are driven by strong sales of its AI services to corporations and subscriptions to its chatbot, ChatGPT.

The flagship product, ChatGPT, is expected to generate $2.7 billion in revenue this year alone, up from $700 million in 2023, with approximately 10 million paying subscribers contributing $20 per month.

Despite these positive revenue projections, OpenAI is also grappling with losses, expected to reach $5 billion this year. These losses are largely attributed to the high costs associated with the computing power needed to train and operate its AI models.

If anyone company with a visionary has a chance of breaking out , it is openAI. Thrive ain’t no spring chicken.

— ravinder syal (@ravisyal) September 27, 2024

As a result, OpenAI’s financials present both a promising growth trajectory and challenges related to its operational costs.

The current funding round, structured as convertible debt, is expected to close by the end of the coming week.

If successful, it could value OpenAI at $150 billion, cementing its place as one of the most valuable private companies in the world.

So much competition on something so new, I don’t see how anyone can invest that much right now. One breakthrough by a startup could send them months behind.

— Ben Silone (@bsilone) September 27, 2024

This valuation hinges on OpenAI’s ability to pull off a complex restructuring plan that would remove control from its non-profit board and lift the cap on investment returns for investors.

The restructuring, first reported by Reuters, has no definitive completion timeline, adding uncertainty to OpenAI’s governance and investment.

Thrive Capital, which also led OpenAI’s previous funding round, is contributing $1.2 billion in total, combining its own funds with a special-purpose vehicle for smaller investors.

So much competition on something so new, I don’t see how anyone can invest that much right now. One breakthrough by a startup could send them months behind.

— Ben Silone (@bsilone) September 27, 2024

If OpenAI’s valuation continues to rise, Thrive could increase its stake next year at a discounted price, giving it a major financial advantage.

OpenAI’s ambitious revenue projections far exceed the earlier forecast of $1 billion in revenue for this year made by CEO Sam Altman.

100b is a biggggggg number

but i guess possible

— AI For Humans Show (@AIForHumansShow) September 27, 2024

While the exact revenue target for Thrive’s additional option remains undisclosed, sources indicate that this opportunity is contingent upon OpenAI hitting substantial financial goals in the coming year.

While Thrive and OpenAI have declined to comment on the specifics of the investment and revenue targets, industry insiders are closely watching OpenAI’s growth trajectory.

I think the whole calculation is not likely to work out. Open source will prevail in the long run.

— SoulSprint (@relentless4o) September 28, 2024

The company’s rapid expansion and rising valuation reflect broader trends in the artificial intelligence industry, where major firms are racing to capture market share and innovate in the increasingly competitive AI space.

Right and growth is just linear algebra.

Great product, they are ahead, but everyone is coming for this market.

— Andrei Calazans (@Andrei_Calazans) September 28, 2024

Thrive Capital’s strategic investment could position it as a key player in OpenAI’s future, should the company achieve its lofty financial goals.

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