Reports are in, that tech giants Apple and Nvidia are considering to back OpenAI in its latest funding round, potentially raising its valuation to $100B.
OpenAI, the company behind the widely popular AI chatbot ChatGPT, is reportedly gearing up for a new fundraising round that could catapult its valuation to an astonishing $100B. The anticipated round has drawn the interest of tech behemoths Apple and Nvidia, signalling the potential for significant strategic investments.
Thrive Capital to lead the funding round
According to multiple reports, Thrive Capital, an early investor in OpenAI, is poised to lead the new funding round with a substantial investment, potentially exceeding $1B. This injection of capital could see OpenAI’s valuation soar, reinforcing its status as a leader in the AI space. The involvement of major players like Nvidia and Apple further underscores the company’s growing influence and the escalating interest in artificial intelligence.
OpenAI’s ties with these tech giants run deep. The company relies heavily on Nvidia GPUs to power and train its generative AI models, while Apple has integrated OpenAI’s ChatGPT into its iOS platform as part of its forthcoming AI-driven feature suite, Apple Intelligence. This collaboration has likely fuelled Apple’s interest in becoming a direct investor in OpenAI.
Microsoft may deepen its stake
Microsoft, already holding a 49% stake in OpenAI, is also expected to participate in the upcoming funding round. The tech giant has been a crucial partner for OpenAI, providing both financial backing and technological infrastructure. As OpenAI’s influence expands, Microsoft’s continued involvement seems a natural progression, solidifying its commitment to leading in AI innovation.
Despite its substantial revenue, OpenAI’s rapid expansion has been costly. The company’s annualised revenue reportedly hit $3.4B earlier this year, but it’s projected to incur losses of up to $5B by the end of 2024. The new funding round is expected to provide the necessary capital to sustain OpenAI’s ambitious growth trajectory, particularly in AI training and staffing.
The significance of OpenAI’s $100B valuation
Achieving a $100B valuation would mark a significant milestone for OpenAI, positioning it among the elite in the tech industry. This valuation reflects the company’s massive potential and the escalating importance of AI in various sectors, from consumer technology to enterprise solutions.
OpenAI’s ChatGPT, with hundreds of millions of monthly users, has established a strong foothold in the AI market. The company’s freemium model, offering GPT-3.5 and GPT-4 to registered users for free, with a $20 per month fee for access to the premium GPT-4 Plus version, has enabled it to maintain a competitive edge against rivals like Alphabet’s Anthropic and Meta Platforms’ emerging AI models.
Legal challenges on the horizon
Despite its success, OpenAI is not without challenges. The company has recently faced legal scrutiny, including a lawsuit from the Centre for Investigative Reporting over alleged unauthorised use of copyrighted content. OpenAI has defended its practices, asserting that its use of such content falls under fair use principles essential for training its language models.
As OpenAI continues to evolve, the upcoming funding round and the potential $100B valuation signal a pivotal moment for the company. With Apple, Nvidia, and Microsoft potentially deepening their stakes, OpenAI is poised to further solidify its leadership in the AI space, navigating both opportunities and challenges in its pursuit of innovation.
