OpenAI secures an extra $10 billion in record funding round, CFO Friar says

OpenAI is raising an additional $10 billion from investors as part of its historic funding round, CFO Sarah Friar told CNBC’s Jim Cramer on Tuesday.

The fresh capital brings OpenAI’s record fundraise to “north of $120 billion,” Friar said in an interview on “Mad Money.” That well exceeds the ChatGPT creator’s initial target of $100 billion. OpenAI announced the first tranche of investment in late February, and it’s been seen as possibly its last private fundraise before a potential blockbuster initial public offering.

Andreessen Horowitz, D.E. Shaw Ventures, MGX, TPG and T. Rowe Price are participants in the new $10 billion commitment, according to Friar. Notably, Microsoft, a longtime investor in OpenAI and one of its major computing providers, is also joining this part of the funding round. While the relationship between Microsoft and OpenAI has evolved, Friar called Microsoft “an incredible partner” and complimented its CEO, Satya Nadella, for being “there early.”

“What I’m really pleased about is we raised money all around the ecosystem,” Friar told Cramer, pointing to involve from venture capital firms, private equity players, mutual funds and sovereign entities. “It didn’t matter where you went, people really believed in this AI revolution and they wanted to put their money to work behind it,” she added.

Friar’s update Tuesday come roughly a month after OpenAI initially announced a $110 billion raise at a $730 billion pre-money valuation. In that wave, Amazon invested $50 billion, while Nvidia and SoftBank each committed $30 billion. In addition to its investment, Amazon announced a multi-year partnership with OpenAI. The companies will build custom models that will support Amazon’s customer-facing applications. OpenAI also said that it will expand its existing $38 billion agreement with Amazon’s cloud computing division by $100 billion over the next eight years.  

“We’re super excited about this deal,” OpenAI CEO Sam Altman told CNBC after the funding news last month. “AI is going to happen everywhere. It’s transforming the whole economy, and the world needs a lot of collective computing power to meet the demand.”

OpenAI, which was founded in 2015, has seen unprecedented growth since launching ChatGPT in late 2022. The viral chatbot has amassed 900 million weekly active users, and the startup raked in roughly $13.1 billion in revenue last year, CNBC has reported.

Friar said around 60% of OpenAI revenue currently comes from consumers, while roughly 40% of revenue is tied to its enterprise accounts. “And that’s actually been growing faster. I think by the end of this year we’ll be more 50-50,” Friar said.

Serving other enterprises is “a very profitable business at scale, and that’s how we will build a sustainable business model,” Friar added.

OpenAI has been making inroads to win over more business clients as competition heats up with Anthropic, the AI startup behind the popular Claude chatbot. Some of OpenAI’s business clients include Amgen, Lowe’s, Estee Lauder and JetBlue, according to its website. Meanwhile, Anthropic, which is backed by Google and Amazon, derives roughly 80% of its revenue from enterprise accounts and lists business clients such as Shopify, HubSpot and Spotify.

Both OpenAI and Anthropic are reportedly weighing plans to go public. Anthropic is in talks to make its public debut in 2026, the Financial Times reported in December. Anthropic closed a $30 billion funding round in February that gave the startup a $380 billion post-money valuation.

When asked by Cramer about a potential IPO, Friar responded that OpenAI is “starting to build that outcome.”

She continued, “Over the long run, look, we have to build a company that’s ready to be a public company. This [funding] round derisks somewhat because we could be ready, but the market might not be ready for us. But I need to make sure the company is healthy and ready to face the public markets. We do view this as all part of an access journey.”

OpenAI has moderated its spending plans after chief executive Altman last fall had touted $1.4 trillion in long-term infrastructure commitments. In February, CNBC reported that OpenAI recently told investors it’s now targeting approximately $600 billion in total compute spend through 2030, a figure more aligned with OpenAI’s projected revenue growth.

On Tuesday, OpenAI said it was shutting down its short-form video app Sora, a decision viewed as the company’s latest attempt to prioritize more profitable initiatives ahead of an IPO.

“We just are facing a lack of compute,” Friar said, in response to a question from Cramer about Sora. “We’re having to make those really difficult decisions. I’ve talked about it to many investors. Often we hold back models, we don’t release features. And this was an example of having to prioritize. It doesn’t mean we won’t get back into areas of creativity. It’s not a ‘never.’ It’s just a, ‘We have to make hard choices.'”

Disclosure: Cramer’s Charitable Trust owns shares of NVDA, AMZN and MSFT.