Apple has reportedly dropped out of talks to join OpenAI's upcoming $6.5 billion funding round. The tech giant's move comes at a rather challenging time for OpenAI, as the AI startup witnessed the exit of several key executives earlier this week.
Expectations for OpenAI's Funding Round
As the funding round progresses, there were expectations that OpenAI's latest fundraising could value the ChatGPT owner at over $100 billion. The big valuation figure is largely owing to all the buzz surrounding AI which has eventually prompted companies, be it any sector, to invest billions in the new technology to stay relevant in the changing market.
Other Companies in Talks
Meanwhile, other companies like Microsoft and Nvidia have also been in discussions to join the funding round, as per a report by the Wall Street Journal. The Satya Nadella-led company has already invested nearly $13 Billion in the AI startup and is expected to pour in an additional $1 Billion.
OpenAI's Business Transformation
The Sam Altman-led company initially started as a non-profit firm but later went on to create a for-profit subsidiary in 2019. However, the non-profit board always had an upper-hand on the decision-making part, at least that's what it looked like.
Now, earlier this week, Reuters reported that the AI startup is exploring a plan to transform its core business into a for-profit benefit corporation. This restructuring could possibly remove the control of the non-profit entity and help it attract more investors. Sources cited in the report indicated that OpenAI's non-profit arm will remain in operation and retain a minority ownership stake in the for-profit entity. It is also expected that Sam Altman will be granted equity in the for-profit company for the first time, which could potentially be valued at $150 billion after the restructuring, as the company aims to eliminate the cap on investor returns.
Outlook for OpenAI
As for now, a lot seems to make the trajectory of the AI startup a bit blurry owing to the recent exits in the C-suite positions.
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