OpenAI Closes Largest Venture Round of All Time

Today on the AI Daily Brief, this week's most important and interesting AI product launches. Before that in the headlines, OpenAI completes what has been called the biggest venture round of all time. The AI Daily Brief is a daily podcast and video about the most important news and discussions in AI. To join the conversation, follow the Discord link in our show. Notes. Welcome back to the AI Daily Brief Headlines edition. All the daily AI news you need in around five minutes today. Once again, we have one of those days where a headline story is big enough that it probably could have been the main story. So it'll be fewer stories in the headlines with a little bit more detail. Basically, you're getting two main episodes in one. And of course, the kickoff headline story is that OpenAI's round has officially come together. It was basically exactly as it was reported, a $6.6 billion round, in this case leaving the company at a valuation of $157 billion. This means that the company has nearly doubled its valuation from its last round, which was less than a year ago. It's being called the largest venture capital deal in history, although of course 6.6 billion is less than the 10 billion that Microsoft invested, and it makes the company the third most valuable private company in the world behind only SpaceX and ByteDance. Couple interesting details that we learned in the reporting. As had previously been reported, the round was led by Thrive capital, which invested 1.3 billion now through a pooled capital special purpose vehicle, but interestingly was also granted an option to invest a further 1 billion by the end of next year at the same valuation. That could look extremely smart if we see another similar valuation increase. By the end of 2025, Microsoft topped up the 13 billion they've already invested with another 750 million, and other investors include Khosla Tiger Global, Altimeter Fidelity, Nvidia and Cathie Woods Ark. In a blog post, OpenAI said the new funding will allow us to double down on our leadership in frontier AI research, increase compute capacity, and continue building tools that help people solve hard problems. A couple things that people are discussing around this one common narrative is just how good Sam Altman is at fundraising, and that certainly seems to be the case. Further confirmation of that are reports that as part of the terms, OpenAI had explicitly asked investors not to make other investments in competitive companies. Among the companies that OpenAI said these investors were not allowed to invest in included anthropic Xai, former OpenAI co founder Ilya Sutskever's Safe Superintelligence, or SSI, as well as, interestingly, perplexity and enterprise AI platform Glean, writes Reuters. The request, while not legally binding, demonstrates how OpenAI is leveraging its appeal to secure exclusive commitments from its financial backers in a competitive field where access to capital is crucial. One source framed it like this to the Financial Times because the round was so oversubscribed, OpenAI said to people, we'll give you allocation, but we want you to be involved in a meaningful way in the business so you can't commit to our competitors. Another source, who is a partner at a VC firm, noted that the previous time that they've seen something like this was when Uber was dominant, adding, if a company holds all the cards, they can force people to do things unnaturally. Now, of course, one big point of conversation is whether OpenAI can possibly be worth this much. My general feeling, as I've expressed before on this show, is that if you are a foundation model investor and think that there's going to be a winner take all in the quest for AGI, broadly speaking, you tend to believe that the upside potential of the post AGI winner is so uncapped that that effectively any valuation is worth it. What's more, given that there are a very small handful of players who could plausibly reach that point, basically the set of companies that OpenAI asked people not to invest in plus Google, your options are really limited and you kind of just have to pay what it costs to play the game. OpenAI is also clearly leaning into the business side of their company. They recently hired a new cfo, Sarah Fryer, who was previously brought into Square to help the company get ready for an IPO, the information writes. Since arriving at OpenAI as CFO in June, Fryer has polished a management presentation for investors to make it dead simple compared to earlier fundraising pitches from the company. The pitch hinges largely on mouth watering comparisons that show OpenAI is one of tech's fastest growing consumer products, with the fastest revenue growth in tech history, comparable only to the likes of Google and Facebook. Now here's The Real Juice OpenAI is apparently forecasting in this deck revenues that would triple to 11.6 billion next year and then double again to 25.6 billion by 2026, if those sort of numbers are even in the ballpark. Obviously, these valuations start to look a little less crazy. One final detail after the announcement of the funding round, OpenAI told employees that it plans to allow them to get some liquidity through a tender offer. CFO Fryer wrote in a message to employees that the $6.6 billion round quote means that we have the ability to offer a tender event to give qualifying employees a liquidity option. This is of course important for employees who have been there for a while and who want to get some liquidity on their now extremely valuable stock or or I guess in this case they're extremely valuable profit units. But it also could mean that we see another wave of exits as people get liquidity and look on to new pastures. For now though, that's the story from OpenAI. The round has been closed and it is every bit as big as it seems like it was going to be. The one other story that I wanted to mention for this slightly main episode Y version of the headlines was a new deal between Nvidia and Accenture. Accenture is creating an Nvidia business group dedicated to helping clients use and scale gen AI tools, lan Guan, the chief AI officer at Accenture, said in a briefing. We are living in the future. We are envisioning starting with our own company. We are reinventing this business. As part of the deal, Accenture plans to train around 30,000 employees for the new group. Accenture has of course been one of the big winners early on in the Genai transformation, Having booked over $3 billion in business in their recently concluded fiscal year, VentureBeat writes the new group will help clients lay the foundation for agentic AI functionality using Accenture's AI refinery, which uses the full Nvidia AI stack tool advance such areas as process Reinvention AI powered simulation and Sovereign AI. And indeed, it really feels like part of this is about getting out ahead of the coming wave of agentic AI applications. Indeed, Nvidia CEO Jensen Huang made it clear that this is all about getting ready for agents in the workplace, he said. We're seeing the beginning of the next and largest wave of AI, which is about companies around the world using AI to become more productive. Basically, we are moving from just the assistant or co pilot version of the AI world to the digital employee or agent version of the AI world. More than anything else, this is just one more indication that that phase seems more than ever just on the horizon. For now, though, that is going to do it for today's AI Daily Brief Headlines edition. Next up, the main episode. Today's episode is brought to you by Plum Generative AI promises to supercharge your productivity and give you superpowers. But if you're not an engineer, trying to harness AI can be incredibly frustrating. Hours wasted wrestling with complex tools only to give up when they don't work. We all have tedious tasks we'd love to automate and challenges AI could solve. But few of us have the skills to fully leverage these game changing technologies. That's where Plum comes in. The mission to make automating your work feel like magic. Imagine typing out AI. 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But for those of you who are using Superintelligent as an individual, once again, if you sign up for Super Intelligent between now and the end of the month using Code Soback, you will get your first month 100% free. Go to be super AI and check it out today. Welcome back to the AI Daily Brief. This has been one of those weeks where there are so many new AI product announcements that we are actually now days behind on some very, very cool updates. Today we're going to look at three of the most interesting announcements that weren't OpenAI related. Kicking off with 11 labs now to understand the context or the opportunity here, I actually want to go back to a tweet from July by Gerard Grigg. Jirod writes Audible's business model about to be rocked with text to voice products 75% is crazy. He's referring to a post from Reddit where someone learned that audible charges a 75% commission on audiobooks. Jirod points out a statement from Bezos himself who once said, your margin is my opportunity. Well, Jirad followed that up this week with a tweet that reads, it was only a matter of time. 11 labs took notice generate audiobooks in seconds. What it's referring to is that the 11Labs Reader app has a new update. It now includes audiobook creation flow for indie authors to directly publish to the app. Basically, if you are an independent author, you can create an audiobook with 11 labs now and publish it to their library. The content library now includes those indie authors, but it also includes popular blog posts as well as classic books. On top of all that, they added new AI celebrity voices. And if you were unsure at all around who this was aimed at, Head of Design Amar Reshi says it's time for a better Audible One of the things that is happening right now, and I'm sure you guys have noticed this, is there is a ton of discourse around Google's Notebook lm. In fact, we are really overdue for a full episode on Notebook lm, which some like Andrej Karpathy have said is maybe the most magical product that they've seen since ChatGPT first came out. A big part of what NotebookLM does is it can take any sort of written or visual material So a long YouTube video, a boring PDF document and turn it automatically into an engaging, interesting podcast. It opens up a whole new world of audio consumption that's on demand and really high quality. This 11 Labs update feels like part of the same trend and if all of these applications retrain people on how they think about audio consumption and frankly probably increase audio consumption, it's going to come with a lot of really cool opportunities. Now moving on from audio, there was also a video update Pika Labs has announced Pika 1.5. They say it has more realistic movements, big screen shots and mind blowing peak effects that break the laws of physics. And boy, I think more than almost anything else. If you want to see the speed at which AI is improving, just look at video from a year ago compared to video today. Pika is now one of a slew of options including Runway Luma Labs that just have incredible video on demand creation capabilities, Tom's Guide wrote. The hyper realistic and physics driven effects are potential game changers for creative professionals who want high quality cinematic style video without the expense of elaborate equipment or an entire production team. Small businesses can potentially create high caliber ads on a budget, making Pico 1.5 an affordable way to produce visually stunning promotional videos. Teachers could Even use the AI tool to break away from traditional PowerPoints, transforming educational content into engaging visual storytelling. I think what that assessment from Tom's Guide gets at is that we are just scratching the surface on use cases for video right now. As is natural, we're going to think about it in terms exclusively of people who are making videos before making videos now. But the real capability and the real transformation power is people who could never have made videos before actually having that medium available to them for all sorts of different use cases, both personal and professional. Third on our list today is an update from Microsoft. Microsoft AI CEO as well as former Inflection CEO and DeepMind co founder Mustafa Suleyman writes, Today we're launching our new Copilot experience. I truly believe we can deliver a calmer, more helpful and supportive era of technology with a copilot that is now more intuitive, more personalized and secure. At Microsoft AI, we are creating an AI companion for everyone. This is the first step. Microsoft CEO Satya Nadella quote tweeted that and said the next phase of Co Pilot marks the beginning of a fundamental shift in the way we connect with technology as we give people a more natural, conversational and personal AI companion. Now you can see here clearly the fingerprints of Mustafa's previous company, Inflection, which, remember, created a chatbot that was specifically designed to be a companion, not a professional assistant. It seems like some of that energy has now found its way into this Microsoft project. We really are at this amazing kind of transition point, AI companions now see what we see, hear what we hear, and speak in the same language that we use to communicate with one another. And of course, that's more real than ever because the new version of Microsoft's Copilot has vision and voice capabilities, as well as a similar promise to OpenAI's advanced voice mode. Microsoft's new voice mode can handle interruptions and pauses. Still, at least from Microsoft's perspective, the big emphasis is around the shift in the relationship with the bot, soliman said. It's on your team. It's backing you up. It's your hype, man. This is a new era of technology that doesn't just solve problems. It's there to support you, teach you and help you. It will be an advocate for you in many of life's most important moments. It'll accompany you to that doctor's appointment, taking notes and following up at the right time. It it'll share the load of planning and preparing for your child's birthday party, and it'll be there at the end of the day to help you think through a tricky life decision. There is also another piece of this, which is that Microsoft is also promising deeper reasoning. They're calling it Think Deeper and it allows the user to instruct Copilot to answer more complex questions using step by step answers. More controversial is of course the Copilot Vision product, which will function somewhat like a slimmed down version of their recall product, which is something we've been following since it was announced. Vision will allow the copilot to see the user's screen and react to things they point to using their cursor. Suleiman gave the example of asking Copilot its opinion on products while shopping online based on reviews sourced from the web, he said. One of the things that seems to be most common is that people ask it for aesthetic advice. They're on a fashion website and they're like, what do you call that pattern? What do you call that dress? While text interactions are stored for 18 months, vision mode will delete all interactions at the end of each session, NYU Stern's chief AI architect Conor Grennon says, just got to attend a surprisingly intimate session with Mustafa Suleyman announcing new Copilot features. Mustafa began by pointing out that we are no longer learning computer languages, they are learning ours. A profound change. As he began to demo new features, he made a point to say that Microsoft interviewed tons of individuals in long form to get a sense of what they wanted, and he came away feeling that people felt overwhelmed. Information, social media hype, fomo and that is his North Star in creating the future of AI. Now I have to admit from my standpoint, I am on the one hand fairly skeptical of this. I fully admit that it could be a failure of imagination, a the bias of someone who has spent 40 years living without a digital companion. But for me personally, an emotionally engaged co pilot is completely disinteresting. But then again, I wasn't interested in PI either. At the same time, I'm glad that they're taking this swing. There is so much emphasis and push to try to simply create the most frontier model when it comes to professional capabilities that I do think there is space for experimentation in totally new modes of interaction that we can't imagine yet. My kids may think I'm insane and curmudgeonly to have said this by the time they get to their teens and twenties. And this is completely de rigueur. So why not have a company like Microsoft, which already has plenty of investment also in the professional side of the AI transformation, not try something interesting and different? The absolute worst that happens is they spend a bunch of money learning something. And guess what? Microsoft has money to spend. For now though, that is going to do it for today's AI Daily Brief. Appreciate you listening or watching as always. And until next time, peace.