Why Did Apple Pass on OpenAI's $6.5 Billion Funding Round?

According to The Wall Street Journal, Apple has reportedly withdrawn from talks to participate in OpenAI's most recent fundraising round, which intends to raise $6.5 billion for the AI startup. The actual reasons for Apple's decision to withdraw from OpenAI's most recent $6.5 billion financing round are yet unknown. Still, there's a chance that things like internal strategy changes will impact the decision, cause worries about OpenAI's price, or cause legal issues. Apple has shown that its relationship with OpenAI is strong, even without financial support from the most recent fundraising round, as it has worked together on several AI projects and incorporated OpenAI technologies into its products.

Despite this change, the firms are still collaborators, as Apple keeps incorporating ChatGPT from OpenAI into Siri and other AI-powered services. The investment round, which includes well-known companies like Microsoft, Nvidia, and venture capital company Thrive Capital, is anticipated to value OpenAI at $150 billion. Given the increased regulatory scrutiny the IT sector is under, Apple's withdrawal may result from a more cautious approach.

Apple has decided to refrain from participating in the newest round of funding

Despite continuing to work together as a collaborative partner with OpenAI, Apple has decided to refrain from participating in the newest round of funding for the AI research startup. Despite not making any investments, Apple is still closely collaborating with OpenAI and actively incorporating ChatGPT into its products, including AI-powered services like Siri. Although Apple has not made public its decision to exit the funding round, there could be several reasons, such as internal strategic priorities, worries about OpenAI's valuation, or even legal issues.

Leading OpenAI's most recent fundraising campaign is Thrive Capital, which intends to invest $1 billion; Microsoft is anticipated to contribute an additional $1 billion on top of its current $13 billion investment. According to reports, Nvidia and other possible investors like UAE-based MGX and Tiger Global Management are negotiating to join.

Apple's decision to withdraw its investment coincides with OpenAI's significant reorganisation

Apple's decision to withdraw its investment coincides with OpenAI's reorganisation, as it becomes a for-profit business instead of a charity. The Wall Street Journal claims that investors have two years to accomplish this change or may demand their money back. OpenAI is also struggling with growing expenses, especially in infrastructure and AI training, where it may spend up to $7 billion annually. A change of leadership has occurred at OpenAI, with three high-ranking executives quitting, among them Chief Technology Officer Mira Murati. The company's internal issues are exacerbated by this, which comes after co-founders Ilya Sutskever and John Schulman left earlier.

Apple and OpenAI seem to be getting along better, even though Apple isn't funding

Authorities in the US and the EU are careful about merging power in AI research, especially regarding Nvidia's supremacy in AI chips and Microsoft's close relationship with OpenAI. It's possible that Apple made the strategic decision to forego this investment round to evade possible regulatory scrutiny. Apple and OpenAI seem to be getting along better, even though Apple isn't funding. Interestingly, the tech giant is using ChatGPT to enable new AI features across iOS and macOS without collecting payment for using the language model. Though Apple's withdrawal from the fundraising round may cause some concern, the two businesses are still working together on AI projects. 

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