Chapter 1: What is the main topic discussed in this episode?
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Welcome to the podcast. I'm your host, Jaden Schaefer. Today on the podcast, we're talking about the latest news from OpenAI, which includes a $110 billion round of funding they just completed. And they have just reached 900 million weekly active users on ChatGPT. We're going to get into all of that, including what their COO has been saying about the rollout of ads into ChatGPT.
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So like I mentioned, they've just raised $110 billion in private funding. I mean, basically, this is one of the largest funding rounds in history. The round had $50 billion from Amazon, $30 billion from Nvidia, and also $30 billion from SoftBank. And then they had a $730 billion pre-money valuation for this. So the entire round is open.
They have additional investors that are expected to join in the coming months. It's kind of interesting when you have around this big. Basically, I think they're just saying, look, $730 billion. This is the valuation. And that might actually creep up for people coming in the future.
But I mean, they're basically proving to everyone, look, we can get any amount of money, $50 billion from Amazon, $30 billion from NVIDIA, $30 billion from SoftBank. And I think what's happening is these are kind of like the anchor players in this round that are going to put in, right, the huge checks.
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Chapter 2: What recent funding did OpenAI secure and why is it significant?
And then they're going to have a lot of VCs and other capital allocators. come in, kind of top up the full fund. Here's what they said about it. They said, we're entering a new phase where frontier AI moves from research into daily use at global scale. Leadership will be defined by who can scale infrastructure fast enough to meet demand and turn that capacity into products people rely on.
I think a huge part of the money that they've raised is tied to infrastructure partnerships, right? I mean, when you're getting it from Amazon, NVIDIA, and NVIDIA, those two players, I think is going to be a lot of that's going to be CapEx. Just like they've done with some prior rounds, some of the investment is going to come in the form of services and compute credits.
So it's not actually just pure cash, but they didn't really disclose what the breakdown is. And I think that that serves a couple different purposes. One, I mean, if they want to get some venture capital dollars in and other people investing sovereign wealth funds, all that kind of stuff, who's going to put actual cash in?
I think it makes it look pretty good if they're like, look, we just got $50 billion from Amazon. Now, is $25 billion of that just credits on AWS or perhaps some form of the $30 billion from Nvidia is just kind of prepayment for the chips that OpenAI is going to directly be purchasing from them?
There's a lot of these kind of deals going on where they're not actually directly getting cash, but the headline number is big and it's able to help them raise actual cash from other players. This is all following their March round that they did last year, which they brought in about $40 billion at a $300 billion valuation. So jumping from $300 billion to $730 billion is massive.
I mean, they're getting close to a trillion dollar valuation here. And going from $40 billion to $110 billion, like they're proving that they are capable of raising money. And this is just the start of the round as well. It's open. We're going to see a lot more. I think the biggest thing that a lot of people are talking about here is the Amazon partnership. This is particularly big.
OpenAI is planning to build an entire new stateful runtime environment for its model on Amazon Bedrock. So they're also basically, I think, expanding a lot of their existing AWS agreements. They have an additional $100 billion on top of the previously committed $38 billion in compute services, and this is kind of part of the deal.
OpenAI is going to use at least 2 gigawatts of AWS Tranium compute, and they're also going to develop some custom models to help support Amazon consumer products. So Amazon CEO Andy Jassy said that this whole collaboration is going to allow developers to run OpenAI-powered services on AWS with some new capabilities that make AI apps and agents a lot more powerful and persistent.
And there's a bunch of earlier reporting that came out that basically suggested $35 billion of Amazon's investment may be contingent on opening either achieving AGI or completing an IPO by the end of this year.
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