Apple Inc. AAPL has reportedly decided to withdraw from negotiations to invest in OpenAI’s funding round, which is projected to raise between $6.5 billion and $7 billion.

What Happened: Apple’s decision to pull out of the talks was made at the last minute. The funding round, spearheaded by venture capital firm Thrive Capital, is due to close next week, reported The Wall Street Journal, citing a person with knowledge of the matter.

Microsoft Corp. MSFT and Nvidia Corp. NVDA are still in talks to join the round, with the former expected to contribute around $1 billion, adding to its existing $13 billion investment in the company.

See Also: OpenAI CTO Mira Murati Steps Down: ‘I Want To Create The Time And Space To Do My Own Exploration…’

Investment firm Tiger Global Management and UAE state-backed company MGX are also reportedly considering participation.

Earlier this month, it was reported that OpenAI is in the process of transitioning from a nonprofit to a for-profit entity, a move encouraged by many investors in the round.

This transition is expected to be a complex process for the startup. If the transition is not completed within two years, investors in the current round will have the right to request their money back.

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Why It Matters: OpenAI’s transition to a for-profit model has also been a contentious issue. Tesla and SpaceX CEO Elon Musk, who co-founded OpenAI in 2015 and left in 2018, has previously questioned the legality of this shift.

Earlier this year, Musk also criticized Apple’s partnership with OpenAI due to concerns about data security and privacy.

Apple had announced its collaboration with OpenAI to incorporate ChatGPT into its operating systems, which led to Musk threatening to ban the Tim Cook-led company’s devices from his ventures including Tesla.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo courtesy: Apple