As OpenAI faces internal transitions and rumors of moving towards profitability, Apple has decided to withdraw from the ongoing financing talks with the company.
OpenAI is currently aiming to raise approximately $6.5 billion in this funding round, expected to be completed next week. Changes in participant contributions could still occur if negotiations are not finalized.
Reports indicate that Apple has recently exited these financing discussions. In contrast, Microsoft and Nvidia remain engaged, with Microsoft planning to invest an additional $1 billion on top of their previous $13 billion investment.
Earlier this year, Apple had announced a collaboration with OpenAI to integrate ChatGPT into iOS 18, iPadOS 18, and the latest macOS versions. Despite this, Apple's initial rollout of its Apple Intelligence system on iPhone did not include ChatGPT, with plans for its integration postponed until next year.
Thrive Capital, which led the previous funding round for OpenAI, is investing over $1 billion in the current round and might double this investment next year if revenue targets are met. By 2025, Thrive Capital has the option to invest an additional $1 billion at the same valuation.
This funding round is conducted through convertible bonds and is expected to push OpenAI's valuation to $150 billion, solidifying its position among the most highly valued tech companies. This valuation will enable OpenAI to restructure, removing nonprofit board control and lifting caps on investor returns. However, if OpenAI does not achieve profitability within two years, this funding will convert to debt.
OpenAI's revenue is expected to significantly exceed CEO Sam Altman's earlier prediction of $1 billion, primarily through enterprise services and chatbot subscriptions. ChatGPT alone is projected to generate $2.7 billion this year, up from $700 million in 2023, with a substantial portion of revenue from enterprise usage.
OpenAI's annual revenue is expected to jump from $3.7 billion in 2024 to $11.6 billion next year, potentially reaching $100 billion by 2029. Despite achieving $300 million in monthly revenue by August, the company anticipates losses of up to $5 billion this year due to operational costs, wages, and rent.
The high costs of running ChatGPT have led to significant daily expenses, estimated at $700,000. As a result, ChatGPT subscription prices are expected to rise from $20 to $22 by the end of the year and could increase to $44 over the next five years.
With over a million third-party developers utilizing OpenAI’s technology, the company anticipates a need for further fundraising next year to cope with escalating expenses, potentially leading to an IPO as early as next year.
