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Apple has reportedly pulled out of negotiations to join OpenAI’s $6.5 billion funding round, according to The Wall Street Journal. The decision leaves Microsoft and Nvidia as potential key investors in OpenAI, which is valued at over $100 billion following the rise of ChatGPT.
Apple Exits OpenAI’s $6.5 Billion Funding Round, Leaving Microsoft and Nvidia in Talks
The Wall Street Journal reported on September 27 that Apple has withdrawn from negotiations to participate in an OpenAI funding round that is anticipated to generate approximately $6.5 billion.
The newspaper reported, citing a source with knowledge of the situation, that the tech behemoth has recently withdrawn from the discussions for the round scheduled to conclude next week.
The report stated that Microsoft and Nvidia have also been discussing participating. Following its $13 billion investment in the company, Microsoft was anticipated to invest approximately $1 billion in the company.
Apple did not immediately respond to a request for comment, while OpenAI declined to answer. Last month, the Journal was the first to disclose that Apple was in discussions as part of OpenAI's new fundraising initiative, which could potentially value the ChatGPT maker at over $100 billion.
The high valuation is a consequence of the AI arms race that OpenAI initiated with the introduction of ChatGPT in late 2022. This race has prompted companies from various industries to invest billions in technology to maintain a competitive edge and capture market share.
Apple Considers Joining OpenAI’s $100 Billion Fundraising Round as AI Arms Race Intensifies
In a recent report by Reuters, on September 26, citing sources familiar with the matter, Apple is discussing investing in OpenAI as part of a new fundraising round that would value the ChatGPT maker above $100 billion.
The news was announced one day after the Journal reported that venture capital firm Thrive Capital would lead the funding round by investing approximately $1 billion in OpenAI.
Apple and OpenAI did not immediately respond to Reuters' requests for comment, while Microsoft and Thrive Capital declined to provide any additional information.
Apple has begun to recognize the significance of OpenAI in its artificial intelligence strategy. In June, the iPhone manufacturer implemented the AI firm's chatbot, ChatGPT, on Apple devices as part of "Apple Intelligence."
Apple was also alleged to have obtained an observer position on OpenAI's board.
According to the report, Microsoft, OpenAI's most significant strategic investor with over $10 billion invested, is also anticipated to participate in the funding round.
Apple and Microsoft have not disclosed their precise investment amounts.
The AI arms race that OpenAI initiated with the introduction of ChatGPT in late 2022 is the reason for its high valuation. This race has prompted companies from various industries to invest billions in technology to maintain a competitive edge and capture market share.
The company, which Sam Altman led, was reportedly valued at $80 billion in February after concluding a transaction in which it would sell its existing shares in a tender offer led by Thrive Capital.
