OpenAI has secured more than $3bn from retail investors as part of a staggering $122bn funding round that values the company at $852bn, including the new capital. This marks the largest private fundraising ever, dwarfing previous rounds. The company tapped retail investors for the first time through a partnership with banks and exchange-traded funds managed by Cathie Wood’s ARK Invest, framing it as a way to democratize access to the AI era’s financial upside. CFO Sarah Friar emphasized the move aligns with OpenAI’s mission to ensure powerful AI benefits humanity broadly, not just the wealthy.

Amazon committed $50bn, split into a $15bn upfront investment and a $35bn tranche contingent on OpenAI going public or achieving artificial general intelligence. Microsoft and major venture firms like Andreessen Horowitz, Sequoia Capital, and Thrive Capital contributed billions more. This capital surge aims to fuel OpenAI’s fierce competition with Anthropic, Google, and others in building frontier AI models. The company is also pushing to monetize its massive user base of 900 million individuals while expanding into enterprise sales.

The influx of retail capital is expected to be crucial for the anticipated IPOs of OpenAI and Anthropic over the next year, with retail investors potentially accounting for up to 30% of the SpaceX float. However, experts caution that growing retail exposure to lossmaking private companies raises concerns about investor sophistication and protections. OpenAI has recently shed projects like Sora and a planned erotic chatbot to sharpen its focus on core AI ventures, while generating $2bn monthly revenue, 60% from consumers.