A new report by Bloomberg claims that Apple and Nvidia may also come to OpenAI’s rescue.
Microsoft, Apple, and Nvidia may collectively invest around $6.5 billion into OpenAI.
The financial worries raise the question of whether OpenAI will eventually survive or not.
OpenAI has been bleeding cash for quite some time now. Even though the Sam Altman-led startup is backed by Microsoft, it has been burning a lot of money to keep the operations running and might on its way to bankruptcy. There have been multiple reports in the past suggesting a similar trajectory for the startup with one by Windows Central claiming that it can run out of cash within 12 months, with projections of $5 billion in losses. Only a fresh round of funding can help OpenAI remain operational beyond this period.
While Microsoft might once again back the startup with a fresh round of funding, a new report by Bloomberg claims that Apple and Nvidia may also come to OpenAI’s rescue. The three tech giants may collectively invest around $6.5 billion into OpenAI, taking its overall market capitalisation to around $150 billion. This will be a major bump from the company’s current valuation of $86 billion.
Apart from this, the company is also trying to raise $5 billion in debt from a few banks. It will make OpenAI one of the biggest startups in the world.
Can OpenAI disappear?
The financial worries raise the question of whether OpenAI will eventually survive or not. It will, absolutely. There is no doubt about that. While the startup may have a poor business model, it has become central to everything in the world of AI. No other company has grown at OpenAI’s pace and it seems like the biggest weapon for Microsoft at the moment.
So, Microsoft of all, will still continue to invest in OpenAI and keep it running. It gives Microsoft an edge over Google and might finally help bridge the gap between the two companies.
The costs of training LLMs will also eventually go down and that should further help OpenAI’s operational costs.
Meanwhile, in an internal memo sent to OpenAI employees in August, CFO Sarah Friar stated that the funds raised by the company would be used to cover computing power and other operational costs. The memo also indicated that OpenAI was planning to allow its employees to sell their shares in a tender offer later this year.
However, we may also see subscription-based services from the platform at some point to generate more revenue.
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