Tech giants eye OpenAI in $100 billion funding round

OpenAI's latest funding round has attracted interest from the three most valuable tech companies, highlighting the startup's critical importance to the broader industry.

Nvidia Corp., the world's largest chipmaker, has been in talks to join a funding round that would value OpenAI at over $100 billion, according to people familiar with the matter. Apple Inc. and Microsoft Corp. have also been in discussions to participate in the financing, said the sources, who requested anonymity because the deliberations are private.

The proposed round would be led by Thrive Capital, which is reportedly investing around $1 billion, Bloomberg reported earlier this week. Nvidia has discussed investing approximately $100 million, two of the sources said.

If the discussions progress, it would mean that three of the biggest names in tech are backing OpenAI, the creator of the groundbreaking ChatGPT chatbot. Each of these companies has become increasingly reliant on the startup in recent years. Microsoft is already OpenAI's largest investor, having contributed roughly $13 billion. Apple, which has been slower to enter the AI space, is leveraging OpenAI to integrate artificial intelligence into an upcoming version of the iPhone operating system. Nvidia's growth is closely tied to the rising popularity of the AI tools it powers.

Representatives for Nvidia, Apple, Microsoft, OpenAI, and Thrive all declined to comment.

Big Tech's influence over artificial intelligence has been under increasing scrutiny, with regulators in both the EU and the US expressing concerns about Nvidia's dominance in AI chips and Microsoft's close relationship with OpenAI. Microsoft has tightly integrated OpenAI's services into its Windows and Copilot AI platforms—a bet that these capabilities will help drive growth.

Apple has also established connections with OpenAI. The iPhone maker is incorporating ChatGPT into its new suite of AI features, known as Apple Intelligence. The company was also expected to take a board observer seat at OpenAI—alongside Microsoft—but those plans were dropped in July.

Nvidia, meanwhile, supplies the essential infrastructure required to develop and run AI tools like ChatGPT. It is the leading manufacturer of so-called AI accelerators, sales of which have surged over the past two years.

In Nvidia's latest quarterly report, released on Wednesday, revenue more than doubled to $30 billion. The company predicted even higher sales in the current quarter, exceeding average analysts' estimates, though investors have become so accustomed to exceptional results that the shares still declined.

OpenAI Chief Financial Officer Sarah Friar informed employees in a memo on Wednesday that the company is seeking fresh capital, without providing further details, according to people familiar with the matter. The company has been in talks to raise funding at a valuation of $100 billion or more since at least December, Bloomberg has reported.

This financing would strengthen one of the world's most valuable venture-backed startups. The runaway success of ChatGPT has also sparked an arms race among tech companies, which are now integrating AI technology across their products and funding other promising startups.

In her memo to employees, Friar stated that OpenAI would use the funding to acquire more computing power and cover other operating expenses, the sources said.

The Wall Street Journal previously reported on the discussions with Apple.