Microsoft, Apple, and NVIDIA will reportedly bail out OpenAI from the shackles of bankruptcy, pushing the ChatGPT maker’s market valuation to over $100 billion

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OpenAI gets an extended lifeline through another round of funding.

ChatGPT privacy settings
ChatGPT privacy settings (Image credit: Future)

What you need to know

  • Last month, reports emerged indicating OpenAI was on the brink of bankruptcy within 12 months, with projections of $5 billion in losses.
  • A new report suggests the ChatGPT maker is in talks to raise funding to keep the business afloat, which could push its market capitalization to over $100 billion. 
  • Microsoft, Apple, and NVIDIA will reportedly participate in the ChatGPT maker's round of funding, though it's unclear how much they'll invest.

Last month, reports emerged indicating that OpenAI is running on fumes and could be on the brink of bankruptcy within 12 months, with projections of $5 billion in losses. Despite the discounted access to Microsoft's Azure services and approximately $3.5 billion generated in revenue, the ChatGPT maker might need another round of funding to remain afloat.

And now, according to a report by CNBC, OpenAI is in talks to raise funding which could push its market valuation to over $100 billion. The company's valuation has significantly grown over the past years — from $29 billion in 2023 to $80 billion earlier this year. 

The company's success can be attributed to the launch of ChatGPT and its broad adoption (arguably the most popular AI-powered chatbot) coupled with the subsequent release of sophisticated and advanced AI models with image and video generation capabilities like DALL-E 3 and Sora. 

Interestingly, Microsoft, OpenAI's largest investor, will reportedly be participating in the round of funding, according to a report by the Wall Street Journal. However, it's unclear how much the Redmond giant will invest. Microsoft and OpenAI's partnership continues to become more complicated, especially after the latter officially listed the ChatGPT maker as a competitor in AI and search despite its multi-billion investment in the business. 

Apple and NVIDIA might be joining OpenAI's round of funding, too

Apple Silicon (Image credit: Source: Apple)

In an exclusive report by The Wall Street Journal, Apple and NVIDIA could potentially join OpenAI's round of funding, pushing its market capitalization well above $100 billion. 

This isn't surprising, as both tech corporations have deep ties with the ChatGPT maker. Apple, often referred to as a late bloomer in the AI landscape, is leveraging OpenAI's technology to power its Apple Intelligence service across its tech stack. 

OpenAI and Microsoft rely on NVIDIA for GPUs to facilitate their advances in the AI landscape. Both companies reportedly invested $100 billion in a project dubbed Stargate to free themselves from the shackles and overreliance on the world's most profitable semiconductor chip brand for AI chips. 

More companies are hopping onto the AI bandwagon, pushing the demand for AI chips to an all-time high. Consequently, NVIDIA struggles to meet the high demands, prompting a need for an alternative source. 

Microsoft, NVIDIA, and Apple have been neck-and-neck in the AI arms race, with each company briefly getting a taste of the world's most valuable company crown. All these companies are involved in OpenAI's business and reliant on its services, which could explain their involvement in the funding exercise. With OpenAI's fast-rising market valuation, it could potentially contend for the world's most valuable company crown against its partners in the foreseeable future.

It's unclear how much NVIDIA and Apple plan to invest in OpenAI's round of funding. This is a developing story, we'll keep you posted as more details about the deal become available. 

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Kevin Okemwa
Kevin Okemwa
Contributor

Kevin Okemwa is a seasoned tech journalist based in Nairobi, Kenya with lots of experience covering the latest trends and developments in the industry at Windows Central. With a passion for innovation and a keen eye for detail, he has written for leading publications such as OnMSFT, MakeUseOf, and Windows Report, providing insightful analysis and breaking news on everything revolving around the Microsoft ecosystem. You'll also catch him occasionally contributing at iMore about Apple and AI. While AFK and not busy following the ever-emerging trends in tech, you can find him exploring the world or listening to music.

2 Comments Comment from the forums
  • americangame
    If OpenAI is losing this much money, maybe LMMs aren't the future we big tech companies think they are.
    Reply
  • stunx120fshwf
    I think, Open AI’s debts, of less than a tenth of a percent, of the valuation of MS, APL, NVDIA, are hardly a problem, with 40 tops processors and AI proliferating. LLMs, will run well, locally as inference models, we’re hitting 3nm, DDR5 at 6GHz, GDDR6 at 15GHz, PCIe5 at 4 times the speed of the common PCIe3. It’s NPU processing, fast short and long term memory, that will make it easy locally. Open AI is worth $100 billion, it’s debts are 1/20th, of it’s market valuation.
    Reply