Apple, Nvidia eye participation in OpenAI’s $100 billion valuation funding round

Tech giants Apple and Nvidia are reportedly in discussions to participate in OpenAI’s upcoming funding round, which could elevate the AI firm’s valuation to an impressive $100 billion.

This potential valuation marks a $20 billion increase from just eight months ago and reflects the continued confidence in OpenAI’s capabilities and market potential.

The OpenAI funding round is expected to be led by Thrive Capital, an early and significant investor in the AI powerhouse. Thrive Capital is reportedly ready to commit around $1 billion to this round, with the possibility of Microsoft also joining the investment. Microsoft has already invested over $13 billion into OpenAI since 2019, highlighting its ongoing support for the company’s AI advancements.

Since launching its innovative chatbot, ChatGPT, in late 2022, OpenAI has attracted significant capital inflow, riding the wave of heightened interest in AI technologies. However, the AI investment landscape has cooled recently, with many startups being acquired by tech giants like Google, Amazon, and Microsoft. Despite these industry consolidations, OpenAI has maintained its independence, focusing on developing and selling its AI products.

Nvidia, a key supplier of the specialised chips driving AI development, is also reportedly considering participation in this funding round. The company has seen remarkable growth, with sales and profits doubling in the last quarter, fuelled by the rising demand for AI-related technologies.

This funding round offers existing shareholders of OpenAI an opportunity to sell their shares, similar to an earlier transaction led by Thrive Capital this year. That deal valued OpenAI at over $80 billion without issuing new shares, underscoring the strong demand for involvement in the company’s growth.

Apple’s potential involvement is particularly noteworthy, given that the company has historically lagged behind competitors like Google, Microsoft, and Meta in the AI race. However, Apple has recently signalled its intent to integrate AI more deeply into its products. Reports suggest that Apple plans to incorporate OpenAI’s ChatGPT into its iPhone devices, marking a significant step in its AI strategy.

The timing of this investment is critical for OpenAI, which, despite generating substantial revenue, is reportedly facing financial challenges, with projections indicating a potential $5 billion loss by year-end. The new capital could provide the resources needed to continue expanding its AI training and workforce.

Apple is expected to reveal more about its AI initiatives, including its “Apple Intelligence” suite, during an upcoming event on 9th September, where it will also unveil its latest iPhones.

This technology promises to enhance existing features like Siri and introduce new tools for message prioritisation and automated writing assistance, signalling Apple’s deeper commitment to AI.