OpenAI's $122 Billion Funding Round

This year, OpenAI has raised the largest private funding round on record. It announced $110 billion in February from Amazon, Nvidia and SoftBank at a $730 billion pre-money valuation, and the round later closed at $122 billion, valuing OpenAI at $852 billion.

Much of the money is staged. Amazon committed $50 billion, with $15 billion upfront and $35 billion subject to future conditions, while Nvidia and SoftBank each committed $30 billion. Contributions from corporate investors were expected in tranches across the year, meaning the headline figure is a commitment rather than cash already received.

The round stood out because the largest investors also supply OpenAI. As part of Amazon's investment, OpenAI agreed to use two gigawatts of computing capacity based on Amazon's chips, and Amazon Web Services became the exclusive third-party cloud provider for OpenAI's Frontier enterprise platform. Nvidia also agreed to supply computing capacity. Some commentators describe these arrangements as circular, since part of the investment is likely to return to investors as spending on their products.

The round shows how much capital AI companies now need. It also shows how closely the largest technology companies are tied to each other, as investors, suppliers and customers at the same time.