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Indonesia Expects $1 Billion Investment Commitment from Apple in a Week

FILE PHOTO: A logo is pictured outside the Apple Fifth Avenue store as Apple's Vision Pro headset is presented there, in Manhattan in New York City, US, February 2, 2024. REUTERS/Brendan McDermid/File Photo
FILE PHOTO: A logo is pictured outside the Apple Fifth Avenue store as Apple's Vision Pro headset is presented there, in Manhattan in New York City, US, February 2, 2024. REUTERS/Brendan McDermid/File Photo
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Indonesia Expects $1 Billion Investment Commitment from Apple in a Week

FILE PHOTO: A logo is pictured outside the Apple Fifth Avenue store as Apple's Vision Pro headset is presented there, in Manhattan in New York City, US, February 2, 2024. REUTERS/Brendan McDermid/File Photo
FILE PHOTO: A logo is pictured outside the Apple Fifth Avenue store as Apple's Vision Pro headset is presented there, in Manhattan in New York City, US, February 2, 2024. REUTERS/Brendan McDermid/File Photo

Indonesia is expecting to get a $1 billion investment commitment from tech firm Apple Inc in a week, its investment minister said on Tuesday, after the government banned iPhone 16 sales for failing to meet local content rules.
Indonesia stopped sales of the smartphone because it requires those sold domestically to comprise at least 40% locally-made parts, which it said Apple had not adhered to. Indonesia plans to increase this requirement, a deputy minister said on Tuesday.
Investment Minister Rosan Roeslani told lawmakers in a hearing that Indonesia expects more investment if Apple decides to make the country part of its supply chain, Reuters reported.
Apple did not immediately respond to a request for comment.
"Whoever benefits from the sales must invest here, create jobs here. What's important is how the global value chain moves here, because once it does, suppliers follow," Rosan said, adding the investment commitment is part of a first phase.
Apple had previously made a $100 million investment proposal to build an accessory and component plant in Indonesia to reverse the ban, but the government rejected that on the grounds it did not meet the principal of fairness.
Apple has no manufacturing facilities in Indonesia, a country of about 280 million people, but has since 2018 set up application developer academies. Indonesia considers that strategy an attempt to meet local content requirement for the sale of older iPhone models.

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OpenAI Abandons Plan to Become For-profit Company

'OpenAI is not a normal company and never will be,' OpenAI CEO Sam Altman wrote in an email to staff posted on the company's website. JOEL SAGET / AFP
'OpenAI is not a normal company and never will be,' OpenAI CEO Sam Altman wrote in an email to staff posted on the company's website. JOEL SAGET / AFP
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OpenAI Abandons Plan to Become For-profit Company

'OpenAI is not a normal company and never will be,' OpenAI CEO Sam Altman wrote in an email to staff posted on the company's website. JOEL SAGET / AFP
'OpenAI is not a normal company and never will be,' OpenAI CEO Sam Altman wrote in an email to staff posted on the company's website. JOEL SAGET / AFP

OpenAI CEO Sam Altman announced Monday that the company behind ChatGPT will continue to be run as a nonprofit, abandoning a contested plan to convert into a for-profit organization.

The structural issue had become a significant point of contention for the artificial intelligence (AI) pioneer, with major investors pushing for the change to better secure their returns, AFP said.

AI safety advocates had expressed concerns about pursuing substantial profits from such powerful technology without the oversight of a nonprofit board of directors acting in society's interest rather than for shareholder profits.

"OpenAI is not a normal company and never will be," Altman wrote in an email to staff posted on the company's website.

"We made the decision for the nonprofit to stay in control after hearing from civic leaders and having discussions with the offices of the Attorneys General of California and Delaware," he added.

OpenAI was founded as a nonprofit in 2015 and later created a "capped" for-profit entity allowing limited profit-making to attract investors, with cloud computing giant Microsoft becoming the largest early backer.

This arrangement nearly collapsed in 2023 when the board unexpectedly fired Altman. Staff revolted, leading to Altman's reinstatement while those responsible for his dismissal departed.

Alarmed by the instability, investors demanded OpenAI transition to a more traditional for-profit structure within two years.

Under its initial reform plan revealed last year, OpenAI would have become an outright for-profit public benefit corporation (PBC), reassuring investors considering the tens of billions of dollars necessary to fulfill the company's ambitions.

Any status change, however, requires approval from state governments in California and Delaware, where the company is headquartered and registered, respectively.

The plan faced strong criticism from AI safety activists and co-founder Elon Musk, who sued the company he left in 2018, claiming the proposal violated its founding philosophy.

In the revised plan, OpenAI's money-making arm will now be fully open to generate profits but, crucially, will remain under the nonprofit board's supervision.

"We believe this sets us up to continue to make rapid, safe progress and to put great AI in the hands of everyone," Altman said.

SoftBank sign-off

OpenAI's major investors will likely have a say in this proposal, with Japanese investment giant SoftBank having made the change to being a for-profit a condition for their massive $30 billion investment announced on March 31.

In an official document, SoftBank stated its total investment could be reduced to $20 billion if OpenAI does not restructure into a for-profit entity by year-end.

The substantial cash injections are needed to cover OpenAI's colossal computing requirements to build increasingly energy-intensive and complex AI models.

The company's original vision did not contemplate "the needs for hundreds of billions of dollars of compute to train models and serve users," Altman said.

SoftBank's contribution in March represented the majority of the $40 billion raised in a funding round that valued the ChatGPT maker at $300 billion, marking the largest capital-raising event ever for a startup.

The company, led by Altman, has become one of Silicon Valley's most successful startups, propelled to prominence in 2022 with the release of ChatGPT, its generative AI chatbot.