Apple and Nvidia Eye Multibillion-Dollar Fundraising for OpenAI

August 30, 2024 07:56 PM AEST | By Team Kalkine Media

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Apple and Nvidia Eye Multibillion-Dollar Fundraising for OpenAI — Image source: shutterstock

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Tech giants Apple, Nvidia, and Microsoft are reportedly preparing to participate in {OpenAI} forthcoming funding round, potentially elevating the company's valuation to over $100 billion. According to reports from Bloomberg and The Wall Street Journal on August 29, both Apple and Nvidia are among the prominent entities expressing interest in this funding round.

Apple’s involvement in this round would mark a notable deviation from its typical investment strategy, which traditionally avoids direct participation in startups. This shift aligns with Apple's broader strategy to remain competitive in the rapidly evolving AI sector, where it faces increasing pressure from both established tech giants and emerging startups.

The funding round is being led by Thrive Capital, which is contributing a substantial portion of the capital. Microsoft, which has already made significant financial commitments to OpenAI, is also participating. Microsoft holds a 49% stake in OpenAI following its investment of $13 billion since 2019. The precise contributions from Apple, Nvidia, and Microsoft are not yet disclosed.

OpenAI reported on August 29 that its flagship product, ChatGPT, has achieved significant growth, with its weekly active users doubling over the past year to exceed 200 million. Despite this, the company's revenue remains modest compared to some market expectations, with annualized sales around $3.4 billion as of May 2024.

Apple's potential engagement with OpenAI could impact its previously neutral stance in the AI domain. In addition to its internal AI developments, Apple announced a partnership with OpenAI in June to integrate AI capabilities into its operating system. There have also been discussions about incorporating other AI technologies into Apple's platforms, including Google's Gemini generative AI model and Meta's technology.

Historically, Apple has been cautious with startup investments, focusing instead on securing critical components and technologies essential to its operations. For instance, the company previously invested in SoftBank’s Vision Fund and the Chinese startup DiDi Chuxing, aiming to support technologies strategically relevant to its business objectives.

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