Not A Good Look for OpenAI if AAPL Does Not Participate in the Capital Raise
It is not a good look for OpenAI if in fact the WSJ is correct in reporting that Apple (AAPL) will not participate in OpenAI’s in-process funding round.
At a minimum, this news tells you that Apple is not happy with OpenAI’s proposed valuation. AAPL may ultimately participate in the round. However, publicly threatening to not participate is the nuclear option as far as negotiation tactics are concerned.
Whatever the case may be, it is not a good look for OpenAI. OpenAI would obviously want its recent partner to participate in the capital round as a show of confidence. A show of confidence to OpenAI employees, customers and competitors, to Apple employees, customers and competitors, and to institutional investors (venture and public equity).
OpenAI’s rumored $150 billion valuation on $4 billion of revenues combined with its management exodus in recent months hurts the company’s ability to recruit potential investors.
Sam Altman is doing a valuation grab at 38x Revenue. Those who participate in the round may very well have buyer’s remorse a year from now.