OpenAI Funding Round Signals AI’s Rising Importance
OpenAI’s latest funding round has attracted interest from three of the most valuable technology companies, underscoring the AI startup’s vital importance to the industry. According to people familiar with the matter, Nvidia Corp, Apple Inc., and Microsoft Corp. have all discussed participating in a financing round that would value OpenAI at more than $100 billion.
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The proposed round is expected to be led by Thrive Capital, which is investing approximately $1 billion, Bloomberg reported earlier this week. Nvidia has reportedly discussed investing around $100 million. If these discussions move forward, it would mean that three of the biggest names in tech – already heavily invested in OpenAI’s success – are prepared to further back the maker of ChatGPT, the groundbreaking chatbot. Each firm has become increasingly reliant on OpenAI’s technology in recent years.
Microsoft, already OpenAI’s largest funder with an estimated $13 billion invested, has integrated OpenAI’s services into its Windows and Copilot AI platforms. Apple, which entered the AI space later than its competitors, is now leaning heavily on OpenAI to incorporate artificial intelligence into an upcoming version of the iPhone operating system. Meanwhile, Nvidia is poised to benefit from the increased demand for AI accelerators.
Nvidia’s latest quarterly report, released on Wednesday, revealed that revenue more than doubled to $30 billion, and the company anticipates even greater sales. In a memo to employees, OpenAI Chief Financial Officer Sarah Friar said that the company was seeking fresh capital. The company has been discussing a funding round at, or above, a $100 billion valuation since at least December, according to Bloomberg. The funding will be used to acquire computing power and pay other operating expenses.
This latest round of funding reflects the ongoing arms race among tech companies as they integrate AI technology into their products and invest in other promising startups. Regulators in the EU and US have expressed concerns about Big Tech’s influence, particularly Nvidia’s dominance in AI chips and Microsoft’s close ties to OpenAI. If finalized, this investment round would further solidify OpenAI’s position as one of the world’s most valuable venture-backed startups.
