Apple receives observer status on the OpenAI board.

7/4/2024, 12:12 PM

New contract brings AI functions to Apple devices: A groundbreaking deal for the tech giants.

Eulerpool News Jul 4, 2024, 12:12 PM

Apple will assume an observer role on the board of OpenAI, gaining similar insights into the AI startup as Microsoft, OpenAI's biggest supporter.

The agreement was made as part of a deal between Apple and OpenAI announced last month, which envisions the integration of ChatGPT into Apple devices. Tim Cook, CEO of Apple, stated that the partnership will be part of a series of AI features for users, including an enhanced Siri voice assistant system, and described it as the "next big step" in integrating the technology into the company's products.

Phil Schiller, who has been leading the App Store at Apple since 1997 and is a member of the executive team, will take on an observer role on OpenAI's board later this year, said a person familiar with the matter. The news was first reported by Bloomberg. OpenAI and Apple declined to comment.

The observer position allows Schiller to participate in OpenAI's board meetings, although he cannot vote. This puts Apple on the same level as Microsoft, which also received a non-voting observer role last year.

Microsoft has invested about $13 billion in OpenAI to grant the ChatGPT maker access to extensive computer and cloud resources while still operating as an independent company. Under the terms of the deal, Microsoft is entitled to receive about half of OpenAI's profits until the investment is repaid.

OpenAI restructured its board in March after Sam Altman, the startup's founder and CEO, rejoined following his dramatic dismissal last November. A review of the board's turmoil found no evidence that he had misled investors or introduced products at an unsafe pace, concerns that had led to his dismissal and subsequent reinstatement.

Three new board members were added, including Instacart CEO Fidji Simo, the former head of the Bill & Melinda Gates Foundation, Sue Desmond-Hellman, and the former president of Sony Entertainment, Nicole Seligman. Former US Treasury Secretary Larry Summers was appointed to the board at the end of last year, and a member of the previous board, Quora CEO Adam D’Angelo, also remains in position.

The deal with Apple comes at a time when technology giants like Alphabet, Microsoft, Amazon, and Meta are competing to develop new AI products while simultaneously competing with or, in some cases, collaborating with technology startups. This has drawn the attention of US antitrust authorities, who have requested information about the partnerships between Big Tech and emerging AI groups.

Apple will not pay OpenAI for using ChatGPT, but the deal will give the startup access to hundreds of millions of users. Apple's suite of generative AI features, referred to as "Apple Intelligence," is set to launch later this year.

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