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OpenAI closes $6.6 billion funding haul with investment from Microsoft and Nvidia

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By Krystal Hu

(Reuters) -OpenAI, the company behind ChatGPT, has raised $6.6 billion from investors, which could value the company at $157 billion and cement its position as one of the most valuable private companies in the world.

The funding has attracted returning venture capital investors including Thrive Capital and Khosla Ventures, as well as OpenAI’s biggest corporate backer Microsoft (NASDAQ:), and new participation from Nvidia (NASDAQ:).

The closing of the funds coincides with the company’s ongoing restructuring efforts and executive changes, including the abrupt departure of its longtime Chief Technology Officer, Mira Murati, last week.

Altimeter Capital, Fidelity, SoftBank (TYO:), and Abu Dhabi’s state-backed investment firm MGX also participated in the round.

OpenAI Chief Financial Officer Sarah Friar told employees on Wednesday that the company will be able to provide liquidity for them through a tender offer to buy back their shares in the company following the funding, although no details and timing have been decided, according to a source. Earlier this year, the company allowed some employees to cash out their shares at a valuation of $86 billion.

Thrive Capital, which committed about $1.2 billion from a combination of its own fund and a special purpose vehicle for smaller investors, negotiated the option to invest another $1 billion next year at the same valuation if the AI firm hits a revenue goal, sources added.

Apple (NASDAQ:), which was in talks to invest in OpenAI, did not end up joining the funding, sources said, who requested anonymity to discuss private matters. Apple did not immediately respond to a request for comment.

The funding came in the form of convertible notes, and the conversion to equity hinges on a successful structural change into a for-profit that would no longer be controlled by the non-profit board and the removal of cap on returns for investors.

The personnel changes haven’t deterred enthusiasm from most investors, who are anticipating significant growth based on the projections by OpenAI CEO Sam Altman.

The company is on pace to generate $3.6 billion in revenue this year on mounting losses of over $5 billion. It projects major revenue jump next year to $11.6 billion, according to sources familiar with the figures.

Investors have also secured some protections as OpenAI undergoes the complex corporate restructuring that would grant Altman equity. The talks are still ongoing, and no timeline has been determined yet.

Investors have negotiated terms that would allow them to claw back their capital or renegotiate the valuation if the changes are not implemented within two years, sources said.

© Reuters. FILE PHOTO: A keyboard is placed in front of a displayed OpenAI logo in this illustration taken February 21, 2023. REUTERS/Dado Ruvic/Illustration/File Photo

OpenAI’s meteoric rise in terms of product popularity and valuation has captured the world’s imagination. Since the launch of ChatGPT, it has attracted 250 million weekly active users. The company’s valuation has also risen from $14 billion in 2021 to $157 billion as it grew revenue from zero to $3.6 billion, far exceeding Altman’s own projections at the time.

The company has told investors it is still actively pursuing artificial general intelligence (AGI), meaning developing AI systems that surpass human intelligence, as it ramps up commercialization and tries to be profitable.

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Israeli strikes kill dozens in Gaza over 48 hours, Palestinian officials say

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By Nidal al-Mughrabi

CAIRO (Reuters) -Israeli military strikes across the Gaza Strip have killed at least 120 Palestinians over the last 48 hours and hit a hospital on the northern edge of the enclave, wounding medical staff and damaging equipment, Palestinian medics said on Saturday.

Among the dead were seven members of one family whose house was hit overnight in the Zeitoun suburb of Gaza City, the health officials said. The rest were killed in separate Israeli strikes in central and southern Gaza.

At the same time, Israeli forces deepened their incursion and bombardment of the northern edge of the enclave, their main offensive since early last month.

A spokesperson for the armed wing of Hamas said a female Israeli hostage in the group’s custody had been killed in a northern area under attack by Israeli forces.

“The life of another female prisoner who used to be with her remains in imminent danger,” spokesperson Abu Ubaida added, accusing the government of Israeli Prime Minister Benjamin Netanyahu of being to blame.

An Israeli military spokesperson said it was investigating the Hamas report.

“At this point, we are unable to confirm or deny it,” the spokesperson said. “Hamas continues to engage in psychological terrorism and act in a cruel manner.”

A group representing hostages’ families did not immediately reply to a request for comment.

DAMAGE, INJURIES AT HOSPITAL

Israel’s military says its operations in northern Gaza aim to prevent Hamas fighters from carrying out attacks and regrouping. Local residents say they fear the goal is to permanently depopulate a strip of territory as a buffer zone, something Israel denies.

At Kamal Adwan Hospital, one of three medical facilities on the northern edge of Gaza that is barely operational, director Hussam Abu Safiya said the ongoing Israeli bombardment in the area appeared aimed at forcing hospital staff to evacuate – something they have refused to do since the incursion began.

“Yesterday (Friday), from the afternoon until midnight, the bombardment directly targeted the entrance to the emergency and reception area several times,” he said in a statement, adding that 12 staff members including doctors and nurses were injured.

The strike also caused significant damage that disrupted the electrical generator, oxygen supply network and water supply, he added.

Asked to comment on Abu Safiya’s statement, the Israeli military said that following an initial review it was “not aware of a strike in the area of the Kamal Adwan Hospital”, adding that it does everything possible to avoid harming civilians.

Israel says Hamas uses hospitals and civilians as human shields, and has made public videos and photos to support that claim. Hamas rejects the allegations and says it does not use the civilian population or facilities for military purposes.

Israel’s 13-month campaign in Gaza has killed more than 44,000 people and displaced nearly all the enclave’s population at least once, according to Gaza officials.

The war was launched in response to an attack by Hamas-led fighters who killed 1,200 people and captured more than 250 hostages in Israel on Oct. 7, 2023, Israel has said.

© Reuters. A Palestinian man inspects a house hit in an Israeli strike, amid the ongoing conflict between Israel and Hamas, in Gaza City November 21, 2024. REUTERS/Mahmoud Issa

Months of attempts to negotiate a ceasefire have yielded scant progress and negotiations are now on hold, with mediator Qatar having suspended its efforts until the sides are prepared to make concessions.

Hamas wants a deal that ends the conflict, and leads to the release of Israeli and foreign hostages held captive in Gaza as well as Palestinians jailed by Israel, while Netanyahu has said the war can end only once Hamas is eradicated.

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Trump expected to pick Brooke Rollins to be agriculture secretary, WSJ reports

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WASHINGTON (Reuters) -U.S. President-elect Donald Trump is expected to pick Brooke Rollins (NYSE:), president of the America First Policy Institute, to be agriculture secretary, the Wall Street Journal reported on Saturday.

If confirmed, Rollins would lead a 100,000-person agency with offices in every county in the country, whose remit includes farm and nutrition programs, forestry, home and farm lending, food safety, rural development, agricultural research, trade and more. It had a budget of $437.2 billion in 2024.

Trump’s transition team did not immediately respond to a request for comment.

The nominee’s agenda would carry implications for American diets and wallets, both urban and rural. Department of Agriculture officials and staff negotiate trade deals, guide dietary recommendations, inspect meat, fight wildfires and support rural broadband, among other activities.

The America First Policy Institute is a right-leaning think tank whose personnel have worked closely with Trump’s campaign to help shape policy for his incoming administration. She chaired the Domestic Policy Council during Trump’s first term.

If confirmed, Rollins would advise the administration on how and whether to implement clean fuel tax credits for biofuels at a time when the sector is hoping to grow through the production of sustainable aviation fuel.

The nominee would also guide next year’s renegotiation of the U.S.-Mexico-Canada trade deal, in the shadow of disputes over Mexico’s attempt to bar imports of genetically modified corn and Canada’s dairy import quotas.

© Reuters. Brooke Rollins, President and CEO of the America First Policy Institute speaks during a rally for Republican presidential nominee and former U.S. President Donald Trump at Madison Square Garden, in New York, U.S., October 27, 2024. REUTERS/Andrew Kelly/File Photo

Trump has said he again plans to institute sweeping tariffs that are likely to affect the farm sector.

He was considering offering the role to former U.S. Senator Kelly Loeffler, a staunch ally whom he chose to co-chair his inaugural committee, CNN reported on Friday.

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ICC warrants are binding, EU cannot pick and choose, EU’s Borrell says

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By Michele Kambas

NICOSIA (Reuters) – European Union governments cannot pick and choose whether to execute arrest warrants issued by the International Criminal Court against two Israeli leaders and a Hamas commander, the EU’s foreign policy chief said on Saturday.

The ICC issued the warrants on Thursday against Israeli Prime Minister Benjamin Netanyahu, his former defence minister Yoav Gallant and Hamas leader Ibrahim Al-Masri, for alleged crimes against humanity.

All EU member states are signatories to the ICC’s founding treaty, called the Rome Statute.

Several EU states have said they will meet their commitments under the statute if needed, but Hungarian Prime Minister Viktor Orban has invited Netanyahu to visit his country, assuring him he would face no risks if he did so.

“The states that signed the Rome convention are obliged to implement the decision of the court. It’s not optional,” Josep Borrell, the EU’s top diplomat, said during a visit to Cyprus for a workshop of Israeli and Palestinian peace activists.

Those same obligations were also binding on countries aspiring to join the EU, he said.

“It would be very funny that the newcomers have an obligation that current members don’t fulfil,” he told Reuters.

The United States rejected the ICC’s decision and Israel said the ICC move was antisemitic.

“Every time someone disagrees with the policy of one Israeli government – (they are) being accused of antisemitism,” said Borrell, whose term as EU foreign policy chief ends this month.

“I have the right to criticise the decisions of the Israeli government, be it Mr Netanyahu or someone else, without being accused of antisemitism. This is not acceptable. That’s enough.”

Israel’s 13-month campaign in Gaza has killed about 44,000 Palestinians and displaced nearly all the enclave’s population while creating a humanitarian crisis, Gaza officials say.

Israel began its offensive after the Hamas-led attack on Oct. 7, 2023, which killed 1,200 people in southern Israel, with more than 250 others taken hostage, Israel has said.

© Reuters. Israeli Prime Minister Benjamin Netanyahu speaks at the plenum, during a discussion on the subject of hostages kidnapped during the deadly October 7, 2023 attack, in Israel's parliament, the Knesset, in Jerusalem, November 18, 2024. REUTERS/Ronen Zvulun/

In their decision, the ICC judges said there were reasonable grounds to believe Netanyahu and Gallant were criminally responsible for acts including murder, persecution and starvation as a weapon of war as part of a “widespread and systematic attack against the civilian population of Gaza”.

The warrant for Masri lists charges of mass killings during the Oct. 7, 2023, attacks. Israel says it has killed Masri.

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