Apple pulls out of OpenAI funding round

Apple is no longer in talks with OpenAI for a funding round expected to raise as much as $6.5 billion, which would have been a rare investment for the Cupertino-based company, according to The Wall Street Journal.

Two other tech giants, Microsoft and Nvidia, have also been in talks to participate in the round. Microsoft is expected to invest around $1 billion, adding to the $13 billion it already has put into the company.

OpenAI is going through a tumultuous times. Last week, the company’s CTO Mira Murati left and in the last few months as many as nine of the company’s co-founders have quit. Only Sam Altman and Wojciech Zaremba remain.

OpenAI is in the process to change its corporate structure from a nonprofit into a for-profit company. If the corporate shift isn’t completed within two years, investors in the current round will have the right to request their money back.

OpenAI’s monthly revenue hit $300 million in August, up 1,700 percent since the beginning of 2023, and the company expects about $3.7 billion in annual sales this year. OpenAI estimates that its revenue will grow to $11.6 billion next year.

Money may also come in the form of a price increase, which the company is reportedly working on, according to The New York Times. A report says that roughly 10 million ChatGPT users pay the company a $20 monthly fee. OpenAI expects to raise that price by two dollars by the end of the year, and will aggressively raise it to $44 over the next five years.

When X owner Elon Musk and his funding left OpenAI in 2018, Altman transformed the operation into what is a called a capped-profit company so that he could raise the billions of dollars needed to build artificial intelligence. It gave the company to offer a return for investors, but these profits were capped. To make matters difficult, the company is governed by a nonprofit board of directors that does not answer to investors.