Nvidia, the leading global chip maker, is reportedly in discussions to participate in a significant funding round for OpenAI, the artificial intelligence (AI) start-up known for its revolutionary ChatGPT chatbot. The potential investment could value OpenAI at over $100 billion, according to sources familiar with the negotiations.
Apple and Microsoft May Also Join the Round
In addition to Nvidia, both Apple and Microsoft are reportedly considering involvement in this financing effort. The round, which is expected to be led by Thrive Capital with an investment of approximately $1 billion, could see Nvidia contributing around $100 million, according to insiders who spoke on condition of anonymity due to the confidential nature of the talks.
Tech Titans Align with OpenAI
If the deal progresses, it would mark a significant consolidation of support from the three most valuable tech companies for OpenAI. Microsoft, already a major backer of OpenAI with an investment of about $13 billion, has integrated the company’s services into its Windows and Copilot AI platforms. Apple, too, has existing connections with OpenAI, including plans to incorporate ChatGPT into its Apple Intelligence suite, though it recently withdrew from a planned board observer seat.
Regulatory Scrutiny on AI Dominance
The involvement of these tech giants has intensified scrutiny from regulators in both the EU and the US. Concerns are particularly focused on Nvidia's dominant position in the AI chip market and Microsoft’s deepening relationship with OpenAI.
Nvidia’s Financial Growth and Strategic Moves
Nvidia's latest quarterly report revealed a dramatic increase in revenue, which surged to $30 billion. The company expects even higher sales in the current quarter, exceeding analysts' forecasts. Despite this growth, Nvidia's stock experienced a decline, as investors have become accustomed to consistently strong results.
OpenAI’s Plans for New Capital
According to a memo from OpenAI’s Chief Financial Officer, Sarah Friar, the company is actively seeking new funding to enhance its computing capabilities and cover operational costs. OpenAI has been working to secure this capital at a valuation of $100 billion or more since at least December. The new financing would further solidify OpenAI’s position as one of the most valuable venture-backed start-ups globally.
The Growing AI Arms Race
The success of ChatGPT has sparked a competitive race among tech companies to integrate AI technologies into their products and invest in emerging start-ups. OpenAI’s latest funding round represents a key move in this rapidly evolving landscape.
The Wall Street Journal has previously reported on Apple's involvement in the discussions regarding this investment.
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