The Bank of Russia unexpectedly maintained its key interest rate at a record-high 21% , defying analysts’ expectations of another significant hike as inflation remains stubbornly elevated. The decision marks a shift toward a more measured approach in balancing economic growth and price stability. Key Details Inflation Concerns: Annual inflation climbed to 8.9% in November, well above the central bank’s 4% target , with inflation expectations reaching 13.9% in December. Policy Rationale: The central bank cited the significant tightening of monetary conditions after October’s 200-basis point hike as sufficient to resume disinflationary processes. Governor Elvira Nabiullina emphasized avoiding both economic overheating and severe slowdowns. Economic Overheating: Elevated government spending on the war in Ukraine and social programs, coupled with labor shortages and rising wages, have fueled strong domestic demand, exacerbating price pressures...
OpenAI Projects Explosive Revenue Growth Amid Major Funding Boost, Apple Backs Out of Investment Talks
Thrive Capital is investing over US$1 billion in OpenAI's current US$6.5 billion fundraising round, with an exclusive option to invest another US$1 billion next year at the same valuation if the AI company meets a specific revenue goal, according to sources familiar with the matter.
OpenAI's revenue is projected to surge to US$11.6 billion in 2025, up from an estimated US$3.7 billion this year, marking a significant leap in the company's financial trajectory. Despite this optimism, the company is facing potential losses of up to US$5 billion this year, largely due to the heavy costs associated with computing power, a source added.
The current funding round, structured as convertible debt, is expected to wrap up by the end of next week and could value OpenAI at US$150 billion, placing it among the world's most valuable private companies. This valuation hinges on completing a complex restructuring to shift control from its non-profit board and remove the cap on investor returns.
Thrive Capital, led by Joshua Kushner, is also offering US$1.2 billion through a combination of its own fund and a special purpose vehicle. Key players in the round include Microsoft, Nvidia, and Khosla Ventures, but only Thrive received the option to invest at a future discounted price, should OpenAI continue its rapid growth.
OpenAI's CEO Sam Altman had earlier forecasted US$1 billion in revenue for 2024, but expectations have now soared. The company's flagship product, ChatGPT, is anticipated to generate US$2.7 billion in revenue this year, a substantial increase from US$700 million in 2023. ChatGPT currently boasts about 10 million paying users, each paying a monthly subscription fee of US$20.
Apple Exits Investment Talks
In a surprising turn, Apple has reportedly withdrawn from negotiations to join the US$6.5 billion funding round. The Wall Street Journal reported that Apple recently exited talks, citing a source familiar with the situation. Microsoft, meanwhile, is expected to invest US$1 billion in the round, adding to its prior US$13 billion investment in OpenAI.
The high valuation of over US$100 billion for OpenAI is a reflection of the AI arms race ignited by the launch of ChatGPT in late 2022, prompting companies across various industries to invest billions in AI to stay competitive.
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