CNBC: OpenAI announces $110 billion funding round

OpenAI announces $110 billion funding round with backing from Amazon, Nvidia, SoftBank OpenAI announced a $110 billion funding round on Friday, a financing thats more than double the size of its last raise a year ago, which was a record for a private tech company.

Amazon invested $50 billion, Nvidia invested $30 billion and SoftBank invested $30 billion in the round, OpenAI said in a release Friday. The investment boosts OpenAI to a $730 billion pre-money valuation, which marks a big jump from its $500 billion valuation in a secondary financing in October. Other investors are expected to join as the round progresses, OpenAI said.Were super excited about this deal, OpenAI CEO Sam Altman told CNBCs Squawk Box on Friday. AI is going to happen everywhere. Its transforming the whole economy, and the world needs a lot of collective computing power to meet the demand.

In addition to its participation in the funding round, Amazon announced a multiyear strategic partnership with OpenAI. The companies will develop customized models that will help power Amazons customer-facing applications as part of the agreement, according to a release.

OpenAI said it is expanding its existing $38 billion agreement with Amazon Web Services by $100 billion over the next eight years. AWS will also serve as the exclusive third-party cloud distribution provider for OpenAIs enterprise platform Frontier, which it unveiled earlier this month.

The companies said Amazons $50 billion investment in OpenAI will start with an initial commitment of $15 billion, followed by another $35 billion in the coming months when certain conditions are met.

Its so early right now in the AI space, and OpenAI is off to an amazing start, Amazon CEO Andy Jassy told Squawk Box on Friday. Theyre going to be one of the very big winners, we believe, long term. I think we can help them quite a bit as part of this partnership.

OpenAI said Friday that nothing about its announcement in any way changes the terms of its partnership with Microsoft, which has been one of the startups major financial backers since 2019. The companies said in a joint statement that the partnership remains strong and central.

Microsoft still has an option to participate in OpenAIs funding round, according to a source familiar with the matter who asked not to be named because the discussions are confidential.