Apple and Nvidia are among companies in discussions to invest in OpenAI as part of a new funding round that could value the artificial intelligence startup at more than $100 billion, said people directly familiar with the matter. The tech giant's potential investment would join a funding round led by venture capital firm Thrive Capital, which is set to invest about $1 billion. Funding discussions, first reported by The Wall Street Journal and Bloomberg, come as OpenAI grapples with skyrocketing costs and tries to firm up its financial position.
Sources say that Microsoft, already the biggest backer of OpenAI, is in discussions to participate in a new funding round. OpenAI, the owner of the viral ChatGPT chatbot, is aggressively canvassing new funding to sustain computing power and other operational costs, CFO Sarah Freer wrote in a memo cited by the Wall Street Journal. According to The Information, its rapid growth and massive investments into the development of artificial intelligence have left the company stretched and on course to deplete cash reserves this year. If completed, the funding round will set OpenAI as one of the most valuable venture-backed startups in the world.
Currently, discussions over a $100 billion valuation represent a huge jump from the $80 billion valuation carried out eight months ago, says The New York Times. Apple is going to cement its links with Open in terms of investment since the iPhone maker is planning to integrate ChatGPT into its new AI features. FYI: Apple doesn't pay Opena money to put ChatGPT on the iPhone and its other devices, while Nvidia supplies key chips that support OpenAI technology.
With the investment, Apple, Nvidia, and Microsoft could join OpenAI's board. On the other side, this power concentration is getting legislation control going ever further. According to Bloomberg, US and EU officials have discussed Nvidia's dominance in chips for artificial intelligence and Microsoft's close relationship with OpenAI. Owing to questioning into their position by the government, Apple and Microsoft had to step down from the advisory role in the board.
OpenAI's fundraising comes amid an artificial intelligence arms race as tech giants race to integrate the technology into their products. The company would reportedly spend US$7 billion annually for AI training and inference, way exceeding projected revenue.