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Apple Withdraws from OpenAI’s $6.5 Billion Funding Round

Apple Withdraws from OpenAI’s $6.5 Billion Funding Round
  • PublishedSeptember 30, 2024

Apple has reportedly decided to withdraw from negotiations to invest in a substantial funding round for OpenAI, which is anticipated to raise up to $6.5 billion, PYMNTS reports.

This information was reported by The Wall Street Journal (WSJ) on September 27, citing sources familiar with the situation.

While Apple has stepped back, other major players such as Microsoft and Nvidia are reportedly still in discussions regarding their participation in the funding round. Microsoft is expected to invest an additional $1 billion in OpenAI, complementing its previous investment of $13 billion.

Apple’s potential involvement would have represented a rare instance of the tech giant investing in another major technology firm. According to previous reports, this funding round could value OpenAI at approximately $150 billion, a significant increase from the $86 billion valuation established during a tender offer earlier this year.

If successful, this fundraising effort would solidify OpenAI’s status as one of the world’s most valuable startups, potentially transforming the AI landscape. Industry experts believe that this funding could lead to a wave of AI commercialization, influencing various sectors and intensifying competition for market dominance.

Hannah Chelkowski, co-founder and general partner at Blank Ventures, highlighted the ongoing consolidation of capital around key players in the large language model (LLM) market, noting that this funding round further establishes OpenAI’s leadership position in the sector.

The commercial ramifications of OpenAI’s fundraising plans could be significant. Businesses across various industries may rush to incorporate advanced AI capabilities, resulting in substantial competitive advantages for those that successfully leverage the technology. Potential applications include more sophisticated chatbots in retail, enhanced fraud detection in finance, and improved diagnostics in healthcare.

Asaf Charnilas, an investor at Team8, emphasized OpenAI’s unique position within the AI industry as a company focused on building foundational AI infrastructure. He suggested that other companies in this space may need to secure larger funding rounds to remain competitive.

Written By
Joe Yans