Apple reportedly snagged an observer role on OpenAI’s board of directors, but an industry watcher was dubious the move would lead to a deeper arrangement.

Bloomberg reported Apple’s Phil Schiller, the chief of its App Store and its former marketing head, will serve in the position on OpenAI’s board.

The news site explained the observer role is due to an agreement announced last month for Apple to embed ChatGPT across its iPhone, iPad and Mac devices as part of a suite of new AI capabilities.

Radio Free Mobile‘s Richard Windsor stated the position on the board could be more beneficial to OpenAI than to Apple.

He noted the freshly announced Apple Intelligence, the company’s personal intelligence system for its iPhone, iPad and Mac devices, does not include any of OpenAI’s technology.

Instead, Apple Intelligence enables users to send their queries to ChatGPT for answers as part of a hybrid solution to ensure privacy and security for customers.

The analyst noted Apple is going to use additional large language models (LLMs) from other companies, which could include Baidu and Google.

“This move by OpenAI to invite Apple onto its board leads me to think that OpenAI was pitching Apple for deeper integration into Apple Intelligence which Apple declined,” Windsor stated in a research note.

He suspects Apple will conclude OpenAI’s models are broadly in line with everyone else’s, “and that means there is no advantage in having an exclusive relationship”.

Bloomberg reported OpenAI stands to benefit from a deeper partnership by gaining access to hundreds of millions of potential users.

Keeping OpenAI at arm’s length
Windsor explained Apple is well-known for developing its “own technology where it can and not create the kind of dependencies that others have on” it.

The analyst doesn’t therefore believe OpenAI has anything to offer for the Apple Intelligence piece that Apple wants.

He said OpenAI firmly believes in ever-larger models consuming more data and more computing power, which is not a priority for Apple.

Windsor stated Apple Intelligence is “full of small models that can each perform a generative AI task”, which OpenAI doesn’t address.

Windsor referred to OpenAI as a basket case that “has demonstrated it is a powder keg waiting to explode” by pointing to CEO Sam Altman briefly leaving the company for a position at Microsoft last year.

He stated Microsoft-backed OpenAI has not resolved its fundamental issues and “that it could be just a matter of time before it goes off again”.

“The last thing any prudent user of OpenAI technology should do is to create a dependency on the company as a source of generative AI,” Windsor said.

He suspects once Apple gets a close look at OpenAI by attending the board meetings it will decide to keep the AI company at bay.

Windsor explained that at some point Microsoft has no choice but to outright buy OpenAI.

“The net result is that I don’t think that this signals a deepening of the relationship between Apple and OpenAI and in fact, may reinforce Apple’s decision to remain at arm’s length,” he said.