OpenAI has all the Strawberries in the World, but No Apple
OpenAI made history with its recent funding round, with a staggering valuation of $157 billion. The stakes on this round were particularly high for those bullish on the growth of foundational models, and seeking to reap benefits in a post AGI and ASI world, which per Sam Altman, is closer than we think. Interestingly, Apple backed out last minute, and there is more than what meets the eye. This could be an indication towards Apple wanting to build its LLM capabilities in-house. Apple likes to ‘Apple Intelligence’ In the generative AI race, Apple is still playing catch up, and their partnership with OpenAI felt like their leap into this space. But the iPhone maker has vast in-house capabilities to its advantage. This could be a huge reason why the funding partnership which was touted as one of its kind, fell flat. While there was a lot of promise for Apple as well in this funding round, ultimately it feels like it would  build its capabilities in house, rather than relying on external outsourcing. While a partnership can still exist outside of a funding round, it is not far-fetched to assume that OpenAI would want its investors to contribute in a meaningful way, and expect some sort of exclusivity, despite the CFO saying otherwise. In an exclusive interview with CNBC, Sarah Frier, CFO at OpenAI, denied the company’s influence on investors to not fund its competitors, like Perplexity, xAI, Safe Superintelligence Inc., among others. She has also called this just another funding round. As for Apple, this could also mean them investing more in their internal R&D and own architecture, instead of investing outside. While cost isn’t what drove Apple from this funding round, it is more to do from a strategic and optics point of view of looking inwards. Earlier this year, with announcements in WWDC and the Glow event, Apple went big into integrating OpenAI into Apple intelligence, and the speculation around Apple joining this funding announcement seemed like a natural, more stronger progression. Independent of this, the integration of ChatGPT into iOS 18 later this year is still happening. But on the whole, this is a clear case of Apple going back to its conservative route of building its own LLMs. It has the wherewithal and capital to build and transform existing technologies and make them more accessible, polished, and user friendly. The goal would be to employ AI on devices as well as continue to offer cloud-based services. The news about Johny Ive, ex-Apple designer, joining OpenAI to work on a hardware device could also be an unfortunate bone of contention between the two companies given Apple’s dominance in hardware. This was previously seen as a point of similarity. Did Microsoft Come Between OpenAI and Apple? Microsoft’s early investment in OpenAI has helped it capitalise on its technology and use it in its suite of products. Microsoft has been investing in OpenAI since 2019, when the company was still young and the wind of AI hadn’t caught up with wall street or the general public. It has participated in the pivotal 2022 and 2023 funding rounds, which gives Microsoft exclusive license access to GPT-4 and all other OpenAI models. Effectively, Microsoft wields significant sway on the company. OpenAI’s valuation was only $1 billion in 2019. It surged to $29 billion after ChatGPT’s success in 2023. Currently, it’s valued at $157 billion, which is also meteoric rise from its $86 billion valuation in February early this year. But still, OpenAI 🤝Apple Apple’s influence on OpenAI is still very palpable. In their recent DevDay in San Francisco, a live demo of an iOS app being built in 30 seconds using o1 was unveiled. For this paradigm shift in the future of app development, OpenAI opted to do the demo with iOS instead of Android. However this pans out, leveraging the respective consumer bases of Apple’s iPhone (1.3 billion users) and OpenAI’s ChatGPT (200 million weekly users) would yield a lot of value long term. OpenAI, and more particularly ChatGPT’s design and product philosophy, is also very similar to the iPhone.
Apple’s decision to back out of OpenAI’s monstrous $6.6 billion funding round involves more than what meets the eye.
Apple’s decision to back out of OpenAI’s monstrous $6.6 billion funding round involves more than what meets the eye.
["Apple", "OpenAI", "Sam Altman", "Superintelligence"]
["Go", "ChatGPT", "API", "Sam Altman", "ELT", "OpenAI", "AI", "Apple", "R", "RAG", "Superintelligence", "generative AI", "xAI"]
["AI", "generative AI", "ChatGPT", "OpenAI", "xAI", "RAG", "R", "Go", "API", "ELT"]
I hold a degree in political science, and am interested in how AI and online culture intersect. I am at aditi.suresh@analyticsindiamag.com &amp; x.com/aditisuresh12