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On Fri, 30 Aug, 4:02 PM UTC
2 Sources
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Apple considers investing in OpenAI, joining rival Microsoft in AI race
Two of the biggest tech companies in the world are reportedly looking to join the startup's newest funding round, which values it at more than $100 billion. The Wall Street Journal first reported Apple's interest in the round, which was quickly followed just over an hour later by a Bloomberg story that Nvidia, too, would like in on the action. And let's not forget Microsoft. The longtime OpenAI backer, which has poured roughly $13 billion into the startup, is also reportedly involved in the latest round. The news comes a day after the initial report of the funding being led by Josh Kushner's Thrive Capital with a $1 billion investment. (It's been a busy month for Kushner, who also spent almost $30 million on a legendary Malibu beach house.) It's not just money coming in. The WSJ also reported some OpenAI investors are looking to sell their shares. The reports show how tech's biggest players are picking sides and placing bets on the companies they view as the future in an AI ecosystem bound to consolidate. Apple already has ties to OpenAI with ChatGPT being incorporated into its products. But it also seemed open to partnering with other players in the space. (In March, it was rumored to be mulling a deal with Google.) Investing in OpenAI doesn't necessarily mean Apple can't work with other players. Microsoft is building its own AI model separate from OpenAI. But an investment makes clear there is a financial incentive for Apple to see OpenAI remain at the top. The three biggest companies in the world want to invest in your company. What could possibly go wrong? Adding so much firepower to one's balance sheet is obviously good, but it's also bound to draw Washington's attention. Everyone is already on edge about the threat of AI. And OpenAI and CEO Sam Altman haven't done a great job of calming nerves. Add in the fact regulators have started cracking down on Big Tech for what they view as monopolistic tendencies, and you can see where this is going. A minority investment isn't the same as an outright acquisition, so there is some legal wiggle room. But investments like these will raise eyebrows as some lawmakers will likely want to avoid more consolidation of power. Meta, Amazon, Anthropic, and, most notably, Google all remain in the AI race. But Apple and Nvidia's interest in OpenAI makes clear it's time to start picking sides.
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Apple is cutting in on Microsoft's dance with OpenAI
This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. Have an account? Log in. Apple's move may further solidify its business relationship with OpenAI, but it could tread on the toes of longtime rival Microsoft, which has reportedly invested $13 billion in OpenAI. It also points to OpenAI's ongoing dominance of the AI space despite a year of headwinds -- and how keen Big Tech (and others) are to get on its dance card. While Jacob Bourne at Emarketer, a sister company to Business Insider, said that a possible Apple investment is an "uncharacteristic plan" for the company, it "underscores the fierce competition and high stakes in the AI race." "While this investment may dilute Microsoft's role as OpenAI's primary benefactor, it reflects the shifting dynamics in the AI landscape where major players, including Microsoft, are diversifying their partnerships to stay competitive," Bourne said. Other potential investors in this funding round include Joshua Kushner's Thrive Capital (again) and Microsoft (again), the Journal reported. AI chipmaker Nvidia, another current darling of the investing world, has also discussed joining the funding round, according to Bloomberg. Still, according to the Journal, Microsoft's investment in OpenAI currently gives it the right to a 49% share of OpenAI's profits. This could complicate any returns for Apple and others. Apple and Microsoft have a rivalry that dates back decades to when founders Steve Jobs and Bill Gates were still at the helm. Both tech giants are valued at over $3 trillion, and the AI boom is only spurring their race to a $4 trillion market cap. When Apple's partnership with OpenAI was announced in June, Bloomberg reported that the iPhone maker would not be paying OpenAI for integrating ChatGPT into Siri. Meantime, Microsoft CEO Satya Nadella was reportedly concerned about the deal's impact. Both Microsoft and Apple were set to have observer roles on OpenAI's board, but the two companies reportedly decided against it due to antitrust concerns. When Apple announced its AI venture at WWDC, it was already behind competitors like Google, Microsoft, and more in debuting its own AI assistant. But by funding OpenAI, Apple would be able to "keep pace with other tech giants," Bourne said.
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Apple is reportedly considering a significant investment in OpenAI, the creator of ChatGPT. This move could potentially reshape the AI landscape and intensify competition with Microsoft, a major backer of OpenAI.
In a surprising turn of events, Apple is reportedly exploring a substantial investment in OpenAI, the artificial intelligence company behind the popular ChatGPT. This potential move could significantly alter the landscape of the AI industry and intensify the rivalry between Apple and Microsoft 1.
Apple's interest in OpenAI underscores the growing importance of artificial intelligence in the tech industry. OpenAI, known for its advanced language models and AI capabilities, has been at the forefront of AI innovation. By considering an investment in OpenAI, Apple signals its intent to bolster its position in the AI race and potentially gain access to cutting-edge AI technologies 1.
The potential deal comes against the backdrop of Microsoft's existing strong partnership with OpenAI. Microsoft has already invested billions of dollars in the AI company and has integrated OpenAI's technology into various products and services. Apple's interest in OpenAI could be seen as a direct challenge to Microsoft's AI strategy and its close relationship with OpenAI 2.
If Apple proceeds with the investment, it could reshape the competitive dynamics in the tech industry. The move would likely accelerate AI development and integration across Apple's product ecosystem, potentially leading to new AI-powered features and services for Apple users. It could also spark a more intense AI arms race among tech giants, with companies vying for partnerships, talent, and technological breakthroughs 2.
OpenAI's openness to investment from Apple, despite its strong ties with Microsoft, suggests a strategic approach to funding and partnerships. By diversifying its investor base, OpenAI could maintain its independence and leverage resources from multiple tech powerhouses. This approach could potentially accelerate AI innovation while balancing the interests of different stakeholders in the AI ecosystem 1.
As Apple explores this potential investment, it may face regulatory challenges. The increasing concentration of AI capabilities among a few large tech companies has already drawn attention from regulators concerned about market competition and the societal impacts of AI. Any deal between Apple and OpenAI would likely face close scrutiny from antitrust authorities and policymakers 2.
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Apple has reportedly withdrawn from discussions to participate in OpenAI's $6.5 billion funding round. The decision comes amidst growing competition in the AI sector, with other tech giants like Nvidia and Microsoft still potentially involved.
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Apple has withdrawn from discussions to invest in OpenAI's latest funding round, valued at $6.5 billion. This decision raises questions about Apple's AI strategy and its relationship with OpenAI, despite plans to integrate ChatGPT into its products.
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OpenAI, the artificial intelligence powerhouse, is reportedly in talks with tech giants Apple and Nvidia for a potential investment that could push its valuation to a staggering $100 billion. This development comes amidst growing competition in the AI sector and concerns about OpenAI's future.
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Tech giants Apple and Nvidia are reportedly in discussions to participate in OpenAI's latest funding round, which could value the AI company at $100 billion. This move signals growing interest in AI technology among major players in the tech industry.
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Apple is reportedly considering an investment in OpenAI, the company behind ChatGPT. This move comes as Apple prepares to integrate AI features into iOS 18 and could signal a significant shift in the tech giant's AI strategy.
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