Apple has dropped out of an OpenAI funding round that was expected to raise $6.5 billion for the AI maker, the Wall Street Journal has reported. While Apple has pulled out, it's not all bad news for OpenAI as both Microsoft and Nvidia are still participating and Microsoft is expected to invest another $1 billion on top of the $13 billion it has already invested.
This round of funding is due to close next week once terms for the investments are set. It's unclear why Apple has decided to withdraw from the funding round but it was confirmed to the WSJ by a person familiar with the matter.
It'll be interesting to see whether this decision impacts the relationship that the two companies have. ChatGPT is integrated into Apple Intelligence, though it is opt-in as user data has to be processed by OpenAI. Apple has plans to also leverage other models such as Google's Gemini so it isn't too dependent upon OpenAI.
The Wall Street Journal said that Thrive Capital, a venture capital company, is leading the round and investing $1 billion. Tiger Global Management and MGX, a firm backed by the UAE, are also looking to invest in the generative AI leader.
This investment round is largely what has prompted OpenAI to become a fully for-profit company in recent days. Some of the investors during this round encouraged the company to become fully for-profit, however, if it doesn't do this in two years, then investors during this current round can get their money back.
The shift to being a fully for-profit company should help the company avoid further disputes within the company too. OpenAI was set up in 2015 with a much more idealistic vision in mind. In one of its first blog posts the company said:
"Researchers will be strongly encouraged to publish their work, whether as papers, blog posts, or code, and our patents (if any) will be shared with the world. We’ll freely collaborate with others across many institutions and expect to work with companies to research and deploy new technologies."
It is now far from this statement, keeping the development of its large language models close to its chest.
Source: The Wall Street Journal via Reuters
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