OpenAI receives a $4 billion revolving credit facility in addition to its recent funding

OpenAI has a $4 billion revolving credit facility, bringing its total liquidity to over $10 billion, CNBC has learned. It followed Wednesday's news that OpenAI closed its latest funding round at a valuation of $157 billion, including the $6.6 billion the company raised from an extensive list of investment firms and large technology companies.

JPMorgan Chase, Citi, Goldman Sachs, Morgan Stanley, Santander, Wells Fargo, SMBC, UBS and HSBC all participated.

The base credit line is $4 billion, with the option to increase it by an additional $2 billion. The loan is unsecured and can be paid out over a period of three years. OpenAI's interest rate is equal to the Secured Overnight Financing Rate (SOFR) plus 100 basis points. SOFR, a measure of the cost of borrowing cash overnight, was just over 5% earlier this week, meaning OpenAI would pay back about 6% on the money it borrowed immediately.

“This means we now have access to over $10 billion in liquidity, giving us the flexibility to invest in new initiatives and operate with full agility as we scale,” OpenAI wrote in a blog post on Thursday, adding adding that the company plans to use this money to invest in research and products, expand infrastructure and attract talent. “It also reaffirms our partnership with an exceptional group of financial institutions, many of which are also OpenAI customers.”

OpenAI's latest funding round included an extensive list of investment firms and large technology companies. Led by Thrive Capital, which planned to invest $1 billion, investors included both existing backer Microsoft and chipmaker Nvidia. SoftBank, Khosla Ventures, Altimeter Capital, Fidelity Management & Research Company, MGX and Tiger Global also participated, according to sources familiar with the situation.

The rapid rise of OpenAI, which began with the launch of ChatGPT in late 2022, has been the biggest story in the tech industry in recent years, bringing the concept of generative artificial intelligence into the mainstream and paving the way for tens of billions of dollars of investment in it AI infrastructure. Earlier this year, OpenAI was valued at $80 billion, up from $29 billion in 2023.

OpenAI generated $300 million in revenue last month, up 1,700% since the beginning of last year, CNBC confirmed last week following a New York Times report. The company expects revenue of $11.6 billion next year, up from $3.7 billion in 2024, according to a person close to OpenAI who asked not to be identified because the Financial information is confidential.

But all that revenue is extremely costly, as OpenAI needs to increase purchases of Nvidia's graphics processing units (GPUs) to train and run its large language models. The company expects a loss of about $5 billion this year, the person said. Microsoft has invested billions of dollars in OpenAI and is a key partner as the software giant strengthens its Azure cloud business.

OpenAI has also experienced many growing pains in recent months, including the loss of key executives, a trend that continued last week with the departure of CTO Mira Murati, head of research Bob McGrew, and research vice president Barret Zoph.

According to a person familiar with the matter, OpenAI held a wide-ranging meeting last Thursday after its board decided to consider restructuring the company into a for-profit separate entity.

At that meeting, Altman denied reports of plans to take a “huge equity stake” in the company, calling that information “simply not true,” according to a person present.

OpenAI Chairman Bret Taylor told CNBC in a statement last week that while the board had discussed the matter, concrete numbers were not on the table.

“The board discussed whether it would be beneficial to the company and our mission if Sam were compensated with equity, but no specific numbers were discussed nor were any decisions made,” Taylor said.