Apple and Nvidia are in discussions to invest in OpenAI as part of a new funding round that could value the artificial intelligence startup at over $100 billion, according to people familiar with the matter. The potential investments by the tech giants would join a round led by venture capital firm Thrive Capital, which is set to put in about $1 billion.
The funding talks, first reported by The Wall Street Journal and Bloomberg, come as OpenAI grapples with soaring costs and seeks to bolster its financial position. Microsoft, already OpenAI’s largest backer, is also in talks to participate in the new round, sources said.
OpenAI, creator of the popular ChatGPT chatbot, is reportedly seeking fresh capital to fund computing power and other operating expenses, as per a memo to employees from CFO Sarah Friar cited by The Wall Street Journal. The company’s rapid growth and hefty spending on AI development have strained its finances, and the company could exhaust its cash reserves this year, according to The Information.
If completed, the funding round would make OpenAI one of the world’s most valuable venture-backed startups. The $100 billion valuation under discussion represents a significant jump from the $80 billion valuation achieved just eight months ago, as reported by The New York Times.
For Apple, an investment would cement its ties to OpenAI as the iPhone maker prepares to integrate ChatGPT into its new AI features. FYI, Apple is not paying OpenAI any money for putting ChatGPT onto iPhone and its other devices. Nvidia, meanwhile, supplies critical chips powering OpenAI’s technology.
If the investment goes through, Apple, Nvidia and Microsoft could get a seat on OpenAI’s board.
However, this concentration of power is drawing increased regulatory scrutiny. Both US and EU officials have expressed concerns about Nvidia’s dominance in AI chips and Microsoft’s close relationship with OpenAI, as noted by Bloomberg. Apple and Microsoft had to leave their advisory roles on the board of directors, as government started questioning their positions.
OpenAI’s fundraising efforts come amid an AI arms race, with tech giants racing to integrate the technology into their products. The company’s annual spending on AI training and inference is expected to reach $7 billion, far outpacing its projected revenue.
The funding talks, first reported by The Wall Street Journal and Bloomberg, come as OpenAI grapples with soaring costs and seeks to bolster its financial position. Microsoft, already OpenAI’s largest backer, is also in talks to participate in the new round, sources said.
OpenAI, creator of the popular ChatGPT chatbot, is reportedly seeking fresh capital to fund computing power and other operating expenses, as per a memo to employees from CFO Sarah Friar cited by The Wall Street Journal. The company’s rapid growth and hefty spending on AI development have strained its finances, and the company could exhaust its cash reserves this year, according to The Information.
If completed, the funding round would make OpenAI one of the world’s most valuable venture-backed startups. The $100 billion valuation under discussion represents a significant jump from the $80 billion valuation achieved just eight months ago, as reported by The New York Times.
For Apple, an investment would cement its ties to OpenAI as the iPhone maker prepares to integrate ChatGPT into its new AI features. FYI, Apple is not paying OpenAI any money for putting ChatGPT onto iPhone and its other devices. Nvidia, meanwhile, supplies critical chips powering OpenAI’s technology.
If the investment goes through, Apple, Nvidia and Microsoft could get a seat on OpenAI’s board.
However, this concentration of power is drawing increased regulatory scrutiny. Both US and EU officials have expressed concerns about Nvidia’s dominance in AI chips and Microsoft’s close relationship with OpenAI, as noted by Bloomberg. Apple and Microsoft had to leave their advisory roles on the board of directors, as government started questioning their positions.
OpenAI’s fundraising efforts come amid an AI arms race, with tech giants racing to integrate the technology into their products. The company’s annual spending on AI training and inference is expected to reach $7 billion, far outpacing its projected revenue.