Apple Reportedly Exits From OpenAI's $6.5 Bln Funding Round

(RTTNews) - Apple Inc. is no longer in talks to participate in an upcoming funding round for Chatbot ChatGPT maker OpenAI, which is expected to raise as much as $6.5 billion, The Wall Street Journal reported citing people familiar with the matter.

There were reports that the iPhone maker would be investing in the Microsoft-backed artificial intelligence or AI startup in the new round, along with further investments from Microsoft and Nvidia. The funding round is slated to close next week, taking OpenAI's total valuation to around $150 billion, significantly higher than the $86 billion valuation from the company's tender offer earlier this year, and a surge from the $14 billion valuation in 2021.

Further, Microsoft, which currently owns a 49 percent share of its profits, plans to invest $1 billion further in OpenAI in the latest round, reports say.

Apple's withdrawal from the planned investment is said to be connected to OpenAI's plans to restructure its core business to become a for-profit benefit business aiming to attract more investors, a shift from its initial non-profit status to build safe and beneficial artificial general intelligence or AGI for the benefit of humanity.

OpenAI, led by Sam Altman, is considered a major player in the artificial-intelligence industry with the super success of its chatbot ChatGPT.

OpenAI Non-profit was founded in late 2015 for the benefit of humanity, and in 2019, its "capped profit" structure was introduced as a subsidiary of its non-profit. It is projected that the new firm will become a for-profit company, and it will no longer be controlled by its non-profit board, while non-profit segment will be retained as a separate entity.

Apple, at its developers conference in June, had introduced Apple Intelligence with a number of AI features backed by a partnership with OpenAI. According to Tim Cook, Apple's CEO, Apple Intelligence is a breakthrough personal intelligence system that puts powerful, private generative AI models at the core of iPhone, iPad, and Mac.

The iPhone maker then said that an updated version of its voice assistant Siri would be able to tap into ChatGPT and will be capable of hundreds of more tasks.

Meanwhile, following Apple's OpenAI partnership, Elon Musk, the co-founder of OpenAI, and founder and CEO of Tesla and SpaceX, among others, had threatened to ban Apple devices from his companies if the tech major incorporates OpenAI technology into its operating system.