OpenAI's ambitions impeded by Apple lawsuit
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How might Apple’s lawsuit slow down OpenAI’s hardware development?
Apple's lawsuit against OpenAI alleging that the company stole its intellectual property could put a real damper on the AI company's ambitions. For more return to the KCBS Rings Central Newsline to speak with Bloomberg editor Dana Woolman. Thank you so much for being with us this afternoon.
Thanks for having me.
Absolutely. So how could this lawsuit affect OpenAI's plans long before the legal resolution is even reached?
Yeah, so there are a few different possible ramifications. And I should say that lawsuits like this, if any other big um high profile tech lawsuits are um setting a precedent here, this could take months or even years to resolve. But in the meantime, um there are a few things. One, um our colleagues at Bloomberg Intelligence um said that it's quite possible that OpenAI will have to um isolate the pieces of um intellectual property that are in dispute here. Um if that were the case, that could certainly slow down the company's um development of its hardware. Um in our story um that's out today we talk about the possibility, um the possible chilling effect of future poaching of Apple employees um who may feel nervous about
um going to the company with all of this going on. Um and also possibly the idea that um common suppliers, hardware suppliers, could feel stuck in the middle and could um feel um some sense they need to choose Apple to preserve that relationship.
Why has Apple been losing workers to open AI?
So of course it's there's um been around four hundred or more um so far. So it's hard to sort of pathologize every single worker who has left. But one um thing that that is broadly true is that Um, open AI has been luring them with fabulously big pay packages in a lot of cases. Um and that has prompted Apple to respond by um implementing higher retention bonuses on its own side. Um and that's been a common theme throughout the AI races, um, poaching races throughout the industry. Um Apple employees have left not just for OpenAI, but other places like um like Meta as well, which also has made a name for offering these really just hugely extravagant pay packages to people.
What are the potential chilling effects on employee poaching and supplier choices?
So um that's been sort of the name of the game and and certainly um has something to expla uh it's certainly part of the explanation for this exodus of of people.
You mentioned devices in dispute. What kind of devices has OpenAI looked at making?
So it's a very mysterious project, but um what we know is that Um the companies at least explored certain categories like um smart speakers, wearables, and that ultimately it has just broadly speaking a vision. Oh pr um producing some hardware that is um essentially represents a future of hardware post iPhone. um which obviously has been Apple's big cash cow until now, um it's it's hard to say exactly what that is. What is the post iPhone world um uh that is different from an iPhone. Um what Bloomberg has reported is that um whatever open AI does release, it's likely to start with something that isn't a smartphone, um in part because that sort of device would be less complicated to engineer. Um and that's not to say that OpenAI, um, its team is a bunch of novices.
If anything, um it it's it's um its team includes many, uh quite a few um big name veterans from Apple. Um but obviously Apple has had a head start and our reporting does suggest that um OpenAI would be more likely to debut a non smartphone product first.
How is Apple integrating AI into its products?
Um in several ways. So um part of it is is the software offerings. Um it recently uh debuted Siri AI, which was really its do over on the AI side after trying to introduce an AI platform. two years ago and it's sort of falling flat, um, really notoriously actually. Um Siri AI is the new um platform and it's going to be fully widely releasing to um Apple's family of hardware products in the fall. Um so there is sort of the software side there, but then Apple also has in development different hardware products that really have AI at the center, um, including a more AI focused pair of AirPods, some home products, um, just a variety of hardware that goes beyond just what is available now and that happens to run um happens to be capable of running Siri A AI.
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