OpenAI Becomes Its Own VC: $400 Million Investment in Next-Gen AI Companies

According to Beating AI news, OpenAI has launched its second Startup Fund, totaling $400 million, entirely funded by OpenAI itself. The first fund, established in 2021, raised $175 million from external investors like Microsoft, with no contributions from OpenAI itself. At that time, OpenAI could receive a portion of the investment profits, but most economic benefits went to the external LPs (limited partners). Now, with OpenAI fully backing the second fund, the profits from investments will no longer primarily flow to external LPs. The first fund has already invested in 24 companies, including Cursor and legal AI company Harvey, and the funds have been fully allocated. Cursor was recently acquired by SpaceX, with the deal reflecting an implied equity value of $60 billion. The new fund will continue to focus on early-stage AI companies, aiming to invest in 8 to 10 companies each year, with a goal of leading investments. Individual investments will start from several million dollars, typically capping at $50 million, with suitable projects potentially receiving up to $100 million. Although the previous OpenAI Startup Fund carried the OpenAI name, it primarily utilized external investors' money. Now, with the first fund showing results, OpenAI is taking the initiative to invest $400 million itself, bearing the risks and retaining more investment returns.