Apple Exits OpenAI Talks as Microsoft Eyes $23 Billion Stake in AI Giant

Apple has withdrawn from investment talks with OpenAI, which anticipates raising up to $6.5 billion in its latest funding round. This withdrawal marks a rare retreat from a significant investment in another major Silicon Valley firm.

According to sources, Microsoft's ongoing negotiations include a planned investment of about $10 billion, adding to its already substantial $13 billion investment in OpenAI. NVIDIA is also reportedly in discussions to join this round. Furthermore, venture capital firm Thrive Capital and UAE state-owned MGX are involved in the investment talks.

As OpenAI transitions from a nonprofit to a for-profit entity, the company faces a complex process with increasing investor interest. However, if OpenAI doesn't complete this transformation within two years, investors will be entitled to demand their funds back.

During this time, OpenAI continues to share financial documents with potential investors, aiming to achieve a $150 billion valuation post-funding. This would position OpenAI as one of the most highly valued tech companies in history.

OpenAI reported $300 million in revenue by August, a threefold increase from the previous year. The forecast for annual revenues is around $3.7 billion, despite an expected $5 billion loss this year due to operational costs.

The partnership with Microsoft represents OpenAI's largest expense, with significant funds allocated to Microsoft’s cloud computing system, which supports OpenAI's operational needs.