After securing a whopping $6.6 billion funding round, ChatGPT-parent OpenAI has bagged a $4 billion revolving credit line.
What Happened: The new credit facility will bolster its liquidity to $10 billion, allowing the AI startup to invest in high-cost computing capacity including Nvidia Corporation’s (NASDAQ:NVDA) chips.
“This credit facility further strengthens our balance sheet and provides flexibility to seize future growth opportunities,” said OpenAI CFO Sarah Friar, in a blog on Thursday.
The credit line is facilitated by a consortium of banks: JPMorgan Chase (NYSE:JPM), Citigroup, Inc. (NYSE:C), Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS), Banco Santander S.A. (NYSE:SAN), Wells Fargo (NYSE:WFC), Sumitomo Mitsui Banking Corporation, UBS Group AG (NYSE:UBS), and HSBC Holdings plc (NYSE:HSBC).
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Why It Matters: Earlier this week, OpenAI, valued at nearly $157 billion, raised funds from returning venture capital investors such as Thrive Capital and Khosla Ventures.
Microsoft Corporation (NASDAQ:MSFT), which has already invested approximately $13 billion into the AI firm over the last five years, and new investor Nvidia, also participated in the funding round.
Despite major executive changes, including the sudden exit of CTO Mira Murati, investors remain optimistic about OpenAI’s growth prospects.
However, OpenAI has also faced criticism from Elon Musk, who accused the company of unfair funding practices.
On the other hand, analysts expect a “tidal wave” of AI spending, with OpenAI’s latest valuation seen as a trigger for this growth stage.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
