The funding would bolster OpenAI, one of the world’s most valuable venture-backed startups
By Mark Gurman, Dina Bass, Katie Roof and Ed Ludlowa
OpenAI’s latest funding round has attracted interest from the top three most valuable tech companies, underscoring how vital the AI startup is to the industry at large.
Nvidia Corp, the world’s largest chipmaker, has discussed joining a funding round that would value OpenAI at more than $100 billion, people familiar with the matter said. Apple Inc and Microsoft Corp have also been in talks about potentially participating in the funding, said the people, who asked not to be identified because the deliberations are private.
The proposed round is expected to be led by Thrive Capital, which will invest about $1 billion, Bloomberg reported earlier this week. Nvidia has talked about investing about $100 million, two of the people said.
If talks go ahead, it would mean three of the biggest names in tech would back OpenAI, creator of the innovative chatbot ChatGPT. Each company has become dependent on the startup in recent years. Microsoft is already OpenAI’s biggest funder, having invested roughly $13 billion. Apple, a late starter in AI, is leaning on OpenAI to help incorporate artificial intelligence into an upcoming version of the iPhone’s operating system. And Nvidia will grow along with the popularity of the tools it powers.
Representatives for Nvidia, Apple, Microsoft, OpenAI and Thrive declined to comment.
Big Tech’s influence over artificial intelligence has been drawing increasing scrutiny, with EU and US regulators expressing concerns about Nvidia’s dominance in AI chips and Microsoft’s close relationship with OpenAI. Microsoft has tightly integrated OpenAI services into its Windows and Copilot AI platforms, a bet that the capabilities will help drive growth.
Apple also has existing ties to OpenAI. The iPhone maker is adding ChatGPT to its new suite of AI features, called Apple Intelligence. The company was also planning to take an observer seat on OpenAI’s board (alongside Microsoft), but those plans were abandoned in July.
Meanwhile, Nvidia provides the critical infrastructure needed to develop and run AI tools like ChatGPT. It is the largest maker of so-called AI accelerators, sales of which have skyrocketed over the past two years.
In Nvidia’s latest quarterly report, released Wednesday, revenue more than doubled to $30 billion. The company predicted even stronger sales in the current quarter, beating average analyst estimates, though investors have become so accustomed to spectacular results that the stock fell anyway.
OpenAI Chief Financial Officer Sarah Friar told employees in a memo Wednesday that the company was seeking fresh capital, without giving details, according to people familiar with the matter. The company has been in talks to raise funds at a valuation of $100 billion or more since at least December, Bloomberg reported.
The funding would bolster one of the world’s most valuable venture-backed startups. ChatGPT’s runaway success has also kicked off an arms race among tech companies, which are integrating AI technology into their products and funding other promising startups.
In his note to employees, Friar said OpenAI would use the funding to acquire more computing power and fund other operating expenses, the people said.
The Wall Street Journal previously reported on the talks with Apple.
First published: September 1, 2024 | 21:05 IS
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