Apple might take a stake in OpenAI as it gets intelligent on AI

Apple isn’t paying OpenAI to carry support for the generativeAI (genAI) firm’s Chat GPT within Apple Intelligence, but it might instead invest in the Microsoft-backed company.

The Wall Street Journal reports that Apple is in talks to take part in a new funding round for OpenAI. If it follows suit, it will join Microsoft, Nvidia, and Thrive Capital in making an investment in the company, which would have a value of more than $100 billion.

A growing sense of union?

Such an investment would strengthen Apple’s existing partnership with OpenAI, announced at WWDC with the news that Apple Intelligence will integrate with ChatGPT, which will provide services Apple does not. 

The relationship meant Apple Fellow Phil Schiller briefly (almost) joined Microsoft on the OpenAI board, though in the end both Cupertino and Redmond stepped down from those seats.

Microsoft has allegedly invested $13 billion to acquire a 49% stake in OpenAI since 2019 and uses ChatGPT within its Copilot software. ChatGPT itself now has more than 200 million weekly users, a number that’s expected to swell once Apple ships iOS 18 this fall.

Apple is smart about intelligence

Word of Apple’s potential investment comes as the company prepares to introduce its next iPhone and new operating systems on Sept. 9. 

iOS 18 is expected to deliver Apple Intelligence (beta) support to US English users a few weeks after the iPhone launch, with Apple introducing additional AI features over time. With Apple Intelligence, Apple’s partnership means users can access ChatGPT from its devices, with the added security of no user requests or IP addresses being stored. 

(It is interesting that OpenAI chose to release its ChatGPT desktop app first on Macs shortly after the iOS integration was announced.)

That compromise between utility and privacy will protect average users, while for business users Apple will introduce MDM support that lets access to such features be disabled on managed devices; that’s something many in IT felt necessary in some data protection scenarios. 

Talking heads…

Reaction to Apple’s potential investment is interesting. Bank of America pointed out that, “a large direct investment by Apple into OpenAI could raise concerns on a potential AI partnership as a long-term alternative to Google search.”

The bigger picture is even more interesting. Apple Intelligence will be made available across all Apple’s big computing platforms: iPhones, including iPhone 15 and iPhone 16, and also M-series iPads and Macs. This wide array of supporting devices means the feature will be available to tens of millions of systems from day one, which also means ChatGPT will be natively supported on them.

This has led to a series of highly positive predictions from analysts. Wedbush Securities analyst Daniel Ives predicts a historic AI-driven iPhone upgrade cycle, arguing that 25% of the world (based on his estimates) will be engaged in AI requests using Apple devices.

Morgan Stanley analyst Erik Woodring also sees Apple Intelligence unleashing pent-up demand and estimated the potential upgrade market is around 40% larger than it was prior to the last hugely successful iPhone release, when 5G was added to the system. This also follows some relative weakness in recent iPhone sales as consumers await the new AI phone. 

Will it still be US-only?

Of course, one wildcard to these events is availability.

At present, Apple Intelligence is limited to the US, or to users outside the US willing to set their devices to US English. That means iPhone shoppers outside the US will not gain access to this integrated AI, which will limit the upgrade frenzy. Apple may already have a plan for this, perhaps extending the service to other English-speaking nations. 

However, the regulatory environment around these tools remains in flux, with new regulations emerging from nations worldwide; that state of uncertainty has already prompted Cupertino to announce it won’t ship these features into the EU until clarity over regulations is in place.

One more thing

The biggest takeaway remains this: Within a matter of weeks, Apple will be unique in offering a fully integrated AI experience across a range of platforms, from smartphones to computers and tablets. Serendipitously, these tools will be available at the same time Windows upgrades intensify, which allows Apple to work to switch PC users to its fully integrated, multi-device, multi-platform ecosystem.

It’s quite possible, if Apple gets this right, that its platforms could end up providing the privacy and security users and business need to fully exploit the potential of AI across every viable computing platform. With such a prize in sight, don’t be too surprised to see activity — and M&A — intensify in the coming months.

More from Jonny Evans

Apple gives IT the power to switch off Apple Intelligence

When was the last time a Mac caused a business disaster?

What to expect at Apple’s Sept. 9 ‘Glowtime’ special event

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