The Information: ‘OpenAI CEO Sam Altman Cements Control as He Secures Apple Deal’

Amir Efrati and Wayne Ma, reporting for The Information (paywalled; Ars Technica has a good summary):

Now, he has fulfilled a longtime goal by striking a deal with Apple to use OpenAI’s conversational artificial intelligence in its products, which could be worth billions of dollars to the startup if it goes well, this person said.

Aside from the financial windfall such a deal might bring, a partnership with Apple has the potential to boost OpenAI’s position within the tech industry over the long term. Altman and his colleagues hope the Apple partnership might one day supplant a longstanding alliance Apple has with Google, OpenAI’s main rival, which today handles searches on Apple’s Safari browser and is critical to preserving Google’s search monopoly.

While a partnership between Apple and OpenAI has been rumored for months, this report by The Information is the first I’m aware to assert that the deal is official. It’s light on details, to say the least, starting with just who is paying whom and how either company plans to make money from the partnership. Presumably it’ll be Apple paying OpenAI for the privilege of integrating with their expensive-to-run cloud-based servers.

The financial arrangement between Google and Apple for default search, on the other hand, is both simple and lucrative. Google makes money showing ads in search results. Safari drives zillions of users to Google search. Google pays Apple roughly $20 billion per year for that traffic acquisition, while selling ads worth many tens of billions of dollars for those searches. Google makes money and maintains access to the Apple demographic. Apple makes money from Google’s payments. And Safari users get Google Search results by default.

There’s nothing like that with OpenAI, right now. There’s also this:

To top it off, Altman is working on two new projects outside OpenAI: the first is a daring effort to make AI server-chip factories and the other is developing an AI-powered personal device, such as earbuds with forward-facing cameras that could emulate the AI companion in the film “Her,” with the aid of former Apple designer Jony Ive. Both efforts could complement his work at OpenAI — which would own stakes in the ventures — and give him even more clout.

Apple and Google’s friendly relationship — Google’s then-CEO Eric Schmidt was an Apple board member from 2006 to 2009 — ended when Google changed Android from being an open alternative to Blackberry to being an open alternative to iPhones. OpenAI is — according to multiple reports — not only looking to create its own personal computing devices, they’re considering partnering with Jony Ive and LoveFrom to do it. They’re setting themselves up to be frenemies with Apple before the first partnership is even announced.