After last year’s brief, chaotic ouster of CEO Sam Altman, OpenAI reformed its board and key partner Microsoft got a seat as a non-voting observer. Microsoft had been blindsided by the Altman episode, which had been set in motion by the old board, and this was a way of ensuring it wouldn’t get any further nasty surprises from the company into which it had invested $13 billion.
But now, according to Bloomberg, another non-voting observer is coming: Apple, as represented by App Store chief Phil Schiller. Apple hasn’t invested anything into OpenAI, but it is integrating OpenAI's models into its devices (for free) and Schiller's role is reportedly part of that agreement.
It’s not hard to see how the situation may become awkward, as Microsoft and Apple are longstanding rivals that will soon both be using OpenAI’s models to power AI assistants on their competing products. Even by the excessively cozy standards of the U.S. AI sector, this may be too close for comfort. There will have to be a lot of recusing going on during certain board discussions, and that might not be enough to make this work.
But even without considering the potential for future disputes too deeply, there’s quite a lot to digest about the immediate implications of letting Apple observe OpenAI's board meetings.
The first and most obvious point is that both parties in the Microsoft-OpenAI love-in are increasingly hedging their bets. It’s been clear for a while that Microsoft is doing this—unsurprisingly, given last year’s turmoil. It absorbed key staff from the AI startup Inflection in March and is now reportedly developing a GPT-rivaling AI model of its own, with Inflection cofounder Mustafa Suleyman leading the effort.
Recently, there have also been hints of OpenAI asserting its own independence in the relationship. The Information reported last week that OpenAI is now making more revenue from directly selling access to its models than Microsoft is making doing the same thing. Building ChatGPT into MacBooks and iPhones is also a big deal, but giving Apple an observer role would confirm that OpenAI and Microsoft are not as tightly intertwined as once seemed the case.
Conversely, the reported development also suggests that Apple may not be hedging its bets as much as it appeared to be doing just a few weeks ago.
It didn’t bring Altman on stage for the announcement of the Apple-OpenAI partnership—he was in the audience—and reporting since then has suggested that Apple may yet also incorporate Google and Anthropic’s AI models into its platforms, as alternatives to OpenAI's ChatGPT. But unless it also plans to take observer roles on each of those companies’ boards, Apple seems set to give OpenAI and its technology an elevated status for a long while yet.
This may also say something about Apple’s progress in developing its own top-tier AI models, which should obviate the need for any such partnerships—when they appear, and if they prove competitive.
I asked all three companies for comment, but none has been forthcoming. More news below—and see you on Friday, as Data Sheet will be taking tomorrow off for the U.S. holiday.
David Meyer
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