Apple Withdraws from OpenAI Funding Round, Raising Questions About Future Collaboration

Apple has withdrawn from a significant OpenAI funding round that was anticipated to raise $6.5 billion for the AI organization, as reported by the Wall Street Journal. Despite Apple’s exit, there is still positive news for OpenAI since both Microsoft and Nvidia remain committed to participating, with Microsoft reportedly prepared to contribute an additional $1 billion on top of its already substantial $13 billion investment.

This funding round aims to complete next week once the investment terms are finalized. The reasons behind Apple’s decision to withdraw are currently unclear, but a source familiar with the situation verified the news to the WSJ.

It will be intriguing to observe if this choice affects the existing relationship between the two tech giants. Notably, ChatGPT has been integrated into Apple Intelligence, though users must opt-in since their data is processed by OpenAI. Additionally, Apple is exploring other AI models, including Google’s Gemini, to reduce its dependence on OpenAI.

According to the Wall Street Journal, Thrive Capital, a venture capital firm, is spearheading the funding round with a projected $1 billion investment. Other potential investors include Tiger Global Management and MGX, a firm financially supported by the UAE, both of which are also considering investing in the leading generative AI company.

This funding initiative is a key factor driving OpenAI towards a completely for-profit model in recent weeks. Some investors in this funding round have encouraged this transition, with stipulations that if OpenAI does not become fully for-profit within two years, they will have the option to reclaim their investments.

Transitioning to a complete for-profit status could also assist OpenAI in mitigating internal conflicts. Established in 2015, OpenAI was originally founded with a more idealistic mission. In one of its inaugural blog posts, the company stated:

“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.”

However, the company has strayed far from this initial vision, now maintaining tight control over its advanced language model developments.

Source: The Wall Street Journal via Reuters

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