AI: OpenAI's new investors Apple & Nvidia. RTZ #464

...joining Microsoft already in 'cap table' mix

The AI Scaling (with Trust) and Investment imperatives of this AI Tech Wave do make for unexpected investment and strategic partnerships. We saw it with Amazon and Google investing together in Anthropic, the second largest LLM AI company. Now we may have Microsoft, Apple and Nvidia, all investing in the next round in OpenAI at a $100 billion valuation, up from $70 billion previously. All making an attention-grabbing ‘cap table’. Let’s unpack.

As Bloomberg summarizes it in “Nvidia Discusses Joining OpenAI’s Latest Funding Round”

• "Apple, Microsoft also have been in talks about participating”

• “Financing would value OpenAI at more than $100 billion”

“Nvidia Corp., the world’s biggest chipmaker, has discussed joining a funding round for OpenAI that would value the artificial intelligence startup at more than $100 billion, according to people familiar with the matter.”

“Apple Inc. and Microsoft Corp. also have been in talks about participating in the financing, said the people, who asked not to be identified because the deliberations are private. The round would be led by Thrive Capital, which is investing about $1 billion, Bloomberg reported earlier this week. Nvidia has discussed investing about $100 million, two of the people said.”

“If the discussions move forward, it would mean the three most valuable tech companies are all backing OpenAI, maker of the groundbreaking ChatGPT chatbot. Microsoft was already OpenAI’s biggest funder, having invested roughly $13 billion.”

OpenAI is growing its businesses with some new metrics out, as Axios updates in “OpenAI says ChatGPT usage has doubled since last year”:

“OpenAI said on Thursday that ChatGPT now has more than 200 million weekly active users — twice as many as it had a year ago.”

“Why it matters: ChatGPT remains the leader among generative AI chatbots, but it's an intensely competitive space with the other big names in tech offering frequent updates in hopes of grabbing share.”

“By the numbers: OpenAI also said that 92% of Fortune 500 companies are using its products and that usage of its automated API has doubled since the release of GPT-4o mini in July.”

“What they're saying: "People are using our tools now as a part of their daily lives, making a real difference in areas like healthcare and education—whether it's helping with routine tasks, solving hard problems, or unlocking creativity," CEO Sam Altman said in a statement to Axios.”

“The big picture: The battle for users remains hotly contested, with Microsoft, Google, OpenAI and Meta all eager to get people to choose their chatbots.”

• “Meta said earlier on Thursday adoption of its open source Llama models has also grown sharply. Usage at the major cloud service providers has doubled between May and July of this year with the release of Llama 3.1.”

The above eye-popping investments and strategic partnerships are tables stakes. Moves that have to be made today, to get to the AI Scaling needed tomorrow. This is but the beginning of the AI Tech Wave as I note constantly in these pages.

Apple and Nvidia already have a defined AI game plan they’re executing. With Nvidia led by Jensen Huang having the opportunity to provide over 90% of the AI infrastructure that drive it all for now.

And OpenAI of course has its own priorities driving its imperatives towards AGI with enhanced AI Reasoning (aka Strawberry), Agentic capabilities, delivered via Voice AI and far more. Not to mention their path to GPT-5 (aka Orion) up next.

And the regulatory actions that are already denting the previous partnerships amongst many of these companies. Most notable being the Government going into the Remedies phase on its antitrust action vs Google on its default $20 billion/year Search deal with Apple and others.

Not to mention how the coming era of Voice AI already is driving a wedge between close former partners like Google and Apple. And how OpenAI also has its own ambitions in that space.

We are a ways away from the AI applications and services that will truly rock our worlds for the better. Delight folks at the mainstream level with reliable and safe services, that truly augment daily tasks and habits.

The tech companies above are doing what they have to do to get there. Building and scaling the lower boxes in the AI Tech Stack above (Boxes 1 through 5), to get to the holy grail of Box 6 above. The billions being invested above are barely the start to Scale AI to where it can go. Stay tuned.

(NOTE: The discussions here are for information purposes only, and not meant as investment advice at any time. Thanks for joining us here)