NVIDIA Eyeing US$100 Million Investment in OpenAI's Latest Funding Round

Leading chipmaker NVIDIA (NASDAQ:NVDA) is reportedly one of several tech giants considering a significant investment in OpenAI's latest funding round, Bloomberg said on Thursday (August 29).

The funding round, led by Thrive Capital, is expected to value the artificial intelligence (AI) startup at over US$100 billion. NVIDIA is said to be eyeing a US$100 million stake in OpenAI as companies race to get exposure to the AI sector.

Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT) are also believed to be interested in the capital raising. Microsoft, currently OpenAI’s largest backer, has invested about US$13 billion in the company to date.

The companies haven't confirmed their involvement yet, but if a deal materializes it would mark a major collaboration between three of the most valuable companies in the tech industry and one of the most prominent AI firms.

Thrive Capital will also reportedly contribute about US$1 billion to this funding round, which comes as OpenAI aims to upscale its operations as a direct response to growing global demand for AI technologies.

OpenAI's flagship product, ChatGPT, has been at the forefront of the AI revolution, transforming interactions with technology and sparking a competitive race among tech companies to integrate AI across their products.

Crucially, NVIDIA's interest in OpenAI is aligned with its broader strategy of dominating the AI hardware market.

The company’s GPUs, which are critical for developing and running generative AI models, have seen soaring demand as AI-powered technologies continue to expand. On Wednesday (August 28), NVIDIA reported strong quarterly results, revealing that its revenue more than doubled to reach US$30.04 billion for the period.

NVIDIA briefly became the company’s most valuable company this past June, leapfrogging past Microsoft and Apple as it was propelled by the growing market for AI chips. An investment in OpenAI would further entrench NVIDIA as a key player in the AI sector, reinforcing its position at the center of AI development.

Apple's involvement in this funding round leans more toward enhancement of its current AI capabilities.

The company has been integrating AI more deeply into its ecosystem, with new features being rolled out under the banner of Apple Intelligence. Bloomberg said in early July that Apple's Phil Schiller was slated to take a board observer seat at OpenAI, allowing him to attend meetings, but this plan was reportedly abandoned later that month.

Microsoft’s deep ties with OpenAI position it as a central player in this latest funding round. The company has closely integrated OpenAI’s technology into products such as its Windows operating system and its Copilot AI platform.

However, Microsoft’s relationship with OpenAI has also attracted regulatory scrutiny, particularly in the EU and the US, where there are concerns about the concentration of power within a few large tech companies in the AI space.

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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.