Apple and Microsoft rivalry deepens with talks for OpenAI funding round

Apple’s move could further strengthen its business relationship with OpenAI, but it could step on the toes of longtime rival Microsoft, which has reportedly invested $13 billion in OpenAI. It also highlights OpenAI’s continued dominance of the AI ​​space, despite a year of headwinds — and how eager Big Tech (and others) are to sign up to its dance book.

While Jacob Bourne of Emarketer, a sister company of Business Insider, said a possible Apple investment is an “uncharacteristic plan” for the company, it “underscores the fierce competition and high stakes in the AI ​​race.”

“While this investment may dilute Microsoft’s role as OpenAI’s primary benefactor, it reflects the changing dynamics in the AI ​​landscape where major players, including Microsoft, are diversifying their partnerships to remain competitive,” Bourne said.

Other potential investors in this funding round include Joshua Kushner’s Thrive Capital (again) and Microsoft (again), the Journal reported. AI chipmaker Nvidia, another current darling of the investor world, has also discussed joining the funding round, according to Bloomberg.

However, according to the Journal, Microsoft’s investment in OpenAI currently entitles it to a 49% share of OpenAI’s profits. That could complicate any returns for Apple and others.

Apple and Microsoft have a rivalry that dates back decades to when founders Steve Jobs and Bill Gates were still at the helm. Both tech giants are valued at more than $3 trillion, and the AI ​​boom is only fueling their race toward a $4 trillion market cap.

When Apple’s partnership with OpenAI was announced in June, Bloomberg reported that the iPhone maker would not pay OpenAI to integrate ChatGPT into Siri.

Meanwhile, Microsoft CEO Satya Nadella was reportedly worried about the impact of the deal.

Both Microsoft and Apple were to have observer roles on OpenAI’s board, but the two companies decided not to because of antitrust concerns.

When Apple announced its AI project at WWDC, it was already behind competitors like Google, Microsoft and others in debuting its own AI assistant.

But by funding OpenAI, Apple could “keep up with other tech giants,” Bourne said.