Apple No Longer in Talks to Join OpenAI Investment Round

https://www.wsj.com/tech/apple-no-longer-in-talks-to-join-openai-investment-round-e3be3e66

by mfiguiere • 2 years ago

98 107 2 years ago

wsj.com

ilrwbwrkhv• 2 years ago

The future will be local models. Let these investors burn the money.

samuelstros2• 2 years ago

Agree. What’s your reasoning?

d13• 2 years ago

Apple is already doing this:

https://www.apple.com/uk/apple-intelligence/

poincaredisk• 2 years ago

I wish, but why do you think so? Last decade the flow was from local compute to the server, not the other way around.

samuelstros2• 2 years ago

While building lix change control I figured out that collaboration was/is the driver behind local to cloud. A secondary reason is compute.

If a system exists that enables (distributed) collaboration on files, the appeal of cloud-based software vanishes. Remote compute becomes possible as well.

At least, that’s the bet we are taking with lix https://lix.opral.com/

terribleperson• 2 years ago

I think a short-term driver towards local models is tooling. As difficult as reliably getting useful output can be, and as fragile as the resulting product can be, you want assurances of stability that don't exist with a model in someone else's cloud.

I'm not an expert on anything, though.

wseqyrku• 2 years ago

Yeah but you have to acknowledge the distance between local compute and a gazillion dollar data center, and even past that the hardware for a local setup is premium tier so it's not gonna quite catch up considering the cost.

tylerchilds• 2 years ago

i can’t imagine being a a trillion dollar company doing any serious business with a company where the entire executive suite has vacated except the ceo that’s clearly doing things.

at this phase, it would be disastrous for apple to bank their reputation on sam.

blackeyeblitzar• 2 years ago

Is this actually related to the recent exodus? Apple is paying OpenAI nothing for use of their model on iPhones. Maybe they just realized being able to get away with paying nothing is a sign of how commoditized models will be.

gwern• 2 years ago

At the time, I read the Apple deal as OA strategically finding an alternative to MS as the sugar-daddy, in terms of free cash flow and datacenter capabilities: it didn't need to be true, it just needed to be a compelling negotiation point with MS. The fact that Apple was outright investing in OA was in line with this view: if OA was just going to be some pluggable commodity, why invest in them? Apple doesn't do random VC for the hell of it.

So Apple withdrawing would seem to be bad news for OA, even if the rationale was something like "the valuation is now too high for our taste" rather than "we are losing faith in them as an organization" or "we think they are completely replaceable".

Overpower0416• 2 years ago

I am disappointment in the AI advancements in the recent years. It turns out progress is made not for the sake of the technology and the good for humankind, but for money. Just another pump and dump...

1over137• 2 years ago

"It turns out?" "In recent years?" It has forever been so.

363874844• 2 years ago

Is this the newest form of protest after Satya tried to burn the company to the ground? Throwing the toy away and saying "I don't want to play with this anymore, it's! It's a pump and dump"?

bob1029• 2 years ago

Apple is on track to own everything in the vertical except chip manufacturing. It would make sense for them to invest in their products and services over something with more varied interests.

incognition• 2 years ago

They aren’t doing that either. Over 80Bn in cash, they’re doing their best Smaug impression.

rvz• 2 years ago

Maybe Apple just realized that they would have bought the top of a massive pump and dump scheme with the huge risk of the researchers leaving the company whilst the training and inference costs suffocates OpenAI.

Sometimes, FOMOing into a pump and dump is not worth it and they were just too late.

redserk2• 2 years ago

I don’t think Apple was too late at all. In all the hype, nobody asks “how does this help $family_member in their day to day”.

I’ve used generative AI to help with writing documents and code. I think it’s fun for creating and modifying images. As someone with no creative talent, Photoshop has been quite fun to use.

But frankly, AI is completely useless in almost every way I see it implemented. I cannot see my grandparents, my mom, or my brother use it for anything practical. Everyone’s rushing to flesh out an investor slide deck without taking a moment to think: “but how can this actually be used in someone’s day-to-day”

I’ve enjoyed Apple’s extremely conservative approach so far — they’ve kept it mostly practical.

For example, let’s take the photos app. Just being able to search for “(dogs name) lake” and having images of my dog near a lake is day-to-day useful.

Another example is their introduction of writing tools to proofread blocks of text. My parents already use Spellcheck and Grammar check, this feels like the next step up.

Compare this to Samsung who took the SV Venture-Fund-appeal-style route and blasted “AI” everywhere they can call a function or put a button. Or Microsoft, who’s Copilot story is focused on imprinting keys on keyboards without answering “how does this help the end user”

This hype around AI is gaudy. Nearly every implementation feels cheap, half-baked, and obnoxious. If Apple’s skepticism of implementing AI so far is “late”, late is not a bad thing at all as an end user.

(All that said, Genmoji looks incredibly stupid and I’m wondering what they were thinking with this…)

thejazzman• 2 years ago

I suspect we don't want it in our day to day, removing human interaction? But it is being used in day to regardless. Eg picking the next song to play.

It seems to excel at helping people do their jobs, double checking their work, etc. It's maddening since it makes constant mistakes. But Apple should be utilizing this to make HomeKit as magical as promised -- rather than automating email, which is basically the lowest hanging copy and paste able fruit available

linotype• 2 years ago

You don’t see how an always available generative agent that could help monitor for cognitive decline and offer relief from loneliness could be helpful for the elderly?

digging• 2 years ago

From my perspective,

This hype around AI is gaudy. Nearly every implementation feels cheap, half-baked, and obnoxious.

is true but does not imply:

AI is completely useless in almost every way I see it implemented

which is not true. It's just harder to get real value out of it than junk. And it's a completely new "skill" to get value out of LLMs which most of us aren't learning.

qgin• 2 years ago

Can you say more about pump and dump?

deafpolygon2• 2 years ago

AI in its current state is a bubble. It's going to pop soon, and then we'll get back to business as usual.

anonzzzies• 2 years ago

Soon is what timeline? It's still getting better; as long as that happens, no one is stopping.

menzoic• 2 years ago

LLMs will continue to be used by increasingly more developers

mjhagen• 2 years ago

I take it you mean that like the dotcom bubble? As in The Internet didn't go away, but the investors returned to a little more sensible thinking.

futureshock2• 2 years ago

I don’t disagree about a bubble. A bubble for promising technology is probably inevitable. But what is this about going back to “business as usual”? Now that GenAI exists it has fundamentally changed what tasks a computer is good at and which use cases are expensive vs. cheap. So there’s no going back. Even if all models stopped improving tomorrow, we’ll be adapting our products for 10 years to take advantage of this fundamental change in capabilities.

Now all that is a long way away from creating an AI god which is what the peak hypers are selling.

cubefox2• 2 years ago

A few years ago saying that there will be soon AI that perfectly understands human natural language was viewed as unrealistic science fiction. Today the possibility of an AI god is regarded as unrealistic science fiction.

skerit• 2 years ago

What does this even mean, really?

ugjka• 2 years ago

It means that the return of investment for fancy email autocomplete is not that big

blitzar• 2 years ago

Seed rounds for Ai startups with nothing more than a napkin saying "do Ai stuff" will have valuations less than a billion.

keyle• 2 years ago

I'd agree with you except that their product is insanely good compared to the rest of the world, and they're leading into a new space as well.

Sure the bubble will pop with the hundreds of nonsense startups going on at the moment, but OpenAI will be fine.

savolai• 2 years ago

What makes openai special in comparison to its competitors that apple wants to integrate their service?

jamil7• 2 years ago

Just a guess but I think Apple was just scrambling to have a foot in the door and is likely working on gradually integrating their own Apple Intelligence services as replacements.

lokimedes• 2 years ago

Apple is the most brand-aware IT company in the world. It is likely they simply recognized the synergy of partnering with the creators of “ChatGPT” that holds the mind space equivalently to “googling” but for AI among their customers.

dagmx3• 2 years ago

In Apple’s presentation they specifically say that the OpenAI integration is akin to a plugin and they may have other providers, especially for domain specific knowledge in the future.

The third party providers is smart imho. Apple take on little risk, and it allows them to avoid being reliant on any one provider.

threeseed2• 2 years ago

Google is a major investor in Anthropic.

Musk is too much of a loose cannon for Apple so Grok is out.

Mistral is in the EU which doesn't have a stable regulatory regime.

Leaving OpenAI which at least has the full support of Microsoft i.e. it will always have access to the best compute resources and endless money.

stavros2• 2 years ago

Mistral is in the EU which doesn't have a stable regulatory regime.

I guess the US's "no regulations ever" can be considered a stable regulatory regime.

terhechte• 2 years ago

They have a deep hatred for Meta, so Llama is out

anileated2• 2 years ago

Making your competitor solely responsible for an important component in your ecosystem is bad news, and ClosedAI is basically an arm of Microsoft only separate to shield them from legal concerns around copyright. (And if the component is not that important, which is possibly the case with LLMs, then why spend so much money and undermine user privacy?)

maeil2• 2 years ago

Google is a major investor in Anthropic.

And Microsoft is an even bigger investor in OpenAI. Why couldn't Apple join Google in this?

There's also Meta, whose money is as endless as Microsoft's.

JimDabell• 2 years ago

Nothing. More integrations are coming in the future and the user will be able to pick which one to use. Apple have already reportedly had talks with Google and Anthropic. They went with OpenAI first because that’s currently the best.

yunohn• 2 years ago

Almost certainly because of the sheer popularity of the ChatGPT brand and majority of user/mind share.

ryankrage77• 2 years ago

Apple reportedly believes that the exposure the iOS 18 integration is giving OpenAI is “of equal or greater value” than cash.

So it's not just gig workers who get offered exposure to pay the bills.

Topfi3• 2 years ago

Funny, though let's not forget, Google and Microsoft are willing to pay merely for default placement on Apples devices. Here, users don't even get the choice to use an alternative.

lotsofpulp• 2 years ago

Alternative for what? I don’t use default Microsoft for anything on Apple, or recall seeing anything Microsoft as a default choice.

Google was default search engine in Safari, but I changed that to DDG.

daghamm• 2 years ago

I think you mean artists.

Gig workers are paid in peanuts and dreams.

mertbio2• 2 years ago

This is good news. When I read the news that Apple is going to invest into OpenAI, I was a bit sad because Apple always tries to avoid to jump into the hype trains like blockchain, NFTs, metaverse etc.

Yes, there is Apple Intelligence but it is mostly writing tools, Xcode code completion, an emoji generator and so on. Nothing like something that is going to replace jobs, AGI and so on how OpenAI is marketing their products.

redleader55• 2 years ago

Apple always tries to avoid to jump into the hype trains like blockchain, NFTs, metaverse etc.

What do you mean by "avoid ..metaverse"? They released a premium headset for AR/VR.

Nevermark• 2 years ago

That isn’t the metaverse.

No dancing Zucks.

“Killer app” (as far as there is one) is focus. Being able to surround yourself with a large Mac screen & several Safari & iOS-type app screens, in a beautiful natural environment, and get real work done.

ClassyJacket• 2 years ago

Metaverse isn't VR. Meta in particular just happens to be integrating them since they make both.

sealeck• 2 years ago

They haven't marketed it as "metaverse" to try to please investors, it's something they've been working on for years and have now got a working initial version they've released.

threeseed2• 2 years ago

Metaverse means the Ready Player One / Horizon Worlds social experience where everyone is an avatar in a shared virtual world all able to interact with each other.

Apple hasn't just not implemented this they've made it impossible for developers to as well. Because only Apple can access the sensors needed to create the 3D avatar and only Apple is allowed access to this avatar i.e. it is restricted to SharePlay with your friends.

hu3• 2 years ago

The knee-jerk replies you're getting are hilarious. The reality distortion field is as strong as ver. You see, because it's Apple, it can't be a bet in virtual reality with a bad connotation (metaverse). To some, Apple can do no wrong nor do they make mistakes. If they invest (and fail) in VR it was from a good angle, not purely for profit (just like Meta).

But seriously now, you can bet your left kidney that if Apple ever manages to make AR/VR work they will try to milk every penny and dime from the gullible while pretending that "it's good for you" like they do with their broken walled gardens. /rant

dagmx3• 2 years ago

The “metaverse” isn’t tied to AR/VR.

The metaverse , in most common definitions, refers to a virtual world and ecosystem as an alternate for the real one. See Ready Player One.

Second life is a metaverse platform in essence. But isn’t VR.

Fortnite is a metaverse but isn’t VR. Their programming language is even called Verse.

The Quest itself isn’t a metaverse product BUT Horizon Worlds (not The confusingly named HorizonOS) is. You can participate in Horizon without a headset.

Apple has no metaverse product. There might be metaverse products on Apple devices but that’s no different than an iPhone or Mac playing the things I mentioned above.

There is almost no definition of metaverse that includes augmented reality.

Topfi3• 2 years ago

metaverse

What about the Apple Vision Pro?

mertbio2• 2 years ago

In my opinion, Apple Vision Pro is a device that will eventually replace iPhone, iPad and Mac. See Meta’s Orion glasses. That’s the goal of the Vision Pro, not metaverse. It just needs some time, like 5-10 years.

nkrisc• 2 years ago

What about it? VR != Metaverse.

(FWIW I think both are way overhyped)

anileated2• 2 years ago

I suspect Apple’s approach will depend on whether they see LLM integration as critical or not.

If not (which I think is the way to go, a functional purpose-built accessible UI is always better than a chatbot, and generative fluff is best left to apps) then they will go for swappable LLM backends, bypassing any legal/geopolitical restrictions. Keeps eggs diversified in multiple baskets and offers negotiation leverage (and that if Apple doesn’t find a no-frills way to pass system-integrated LLM use costs onto end users).

If yes, they will probably go full in-house. They can afford it.

daft_pink2• 2 years ago

You have to feel that apple is missing out on buying into this investment as it will clearly become very valuable.

onion2k• 2 years ago

That isn't useful to Apple though. Apple has a lot of money.

What Apple needs more than anything else is market differentiation. They need products, patents, ideas, etc that set their products apart from their competitors. Buying into OpenAI doesn't get them that (unless they outbid everyone else). Apple will be better off using their capital to invent AI of their own, or buying/investing in an OpenAI alternative.

Apple can use their market leverage to get OpenAI integration. They don't need to spend money.

tim3332• 2 years ago

The alternative is to invest the money into their own AI which will probably also become valuable.

daft_pink2• 2 years ago

I think they have enough money to do both

deepfriedchokes• 2 years ago

If there is no moat on this stuff, what’s the point of buying it? Just build your own. They’re better off investing in people.

SebFender• 2 years ago

As this is certainly not a money issue it may be in relation to privacy issues found by the Apple due diligence team at some point. Fixable - let's do it. Not fixable - let's move on to something else.

I was part of a few due diligence teams and the things we found sometimes broke the potential investment in less than a day in...

Nobody's perfect - but I think it's safe to say Apple makes a significant effort when it comes to privacy.

spking• 2 years ago

https://archive.ph/Dc6jS

mgh2• 2 years ago

If AMD can do it, they can as well: https://news.ycombinator.com/item?id=41674382

bg24• 2 years ago

Apple realized that 1/OpenAI is no longer the ONLY game in town, and 2/Models != Platform. Maybe, maybe Apple can achieve what they need (Apple Intelligence), while keeping the doors open for multiple models.

MuffinFlavored• 2 years ago

Apple realized that 1/OpenAI is no longer the ONLY game in town

Who is the other game in town for them?... Meta? Google?

rgrmrts• 2 years ago

Anthropic as well

mrbungie3• 2 years ago

No one from the list (also add Anthropic to that list) is SOTA right now, but maybe Apple wants to keep its options open as the gap closes between OAI and the others.

hintymad• 2 years ago

My hunch is that OAI's models do not not really offer visible advantages over other open models for Apple's use cases. Even if OAI's models are more advanced, Apple can resort to cheaper post-processing to fill the gap. In Apple's scale, Apple should just host its own models to lower the long-term cost, as well as to have full control to iteratively improve the quality of the AI offerings.

Apple No Longer in Talks to Join OpenAI Investment Round

Related Stories