Neil Cybart 7/10/24 Neil Cybart 7/10/24

Microsoft and Apple Give Up OpenAI Observer Board Seats, AI Regulation Silliness, A Few Apple TV+ Observations

We kick things off with my thoughts on changes to OpenAI’s non-voting observer board seats. The discussion then turns to why so much of these attempts to regulate AI come across as silly. We conclude with a few Apple TV+ observations that have been on my mind. “Dark Matter” became the latest Apple TV+ series to be placed on my watched list.

Happy Wednesday.

I will be taking two vacation days to make this upcoming weekend a long one. The next update will go out on Tuesday.

Microsoft and Apple Give Up OpenAI Observer Board Seats

On Monday, we talked about Apple being given an OpenAI non-voting observer board seat as part of the Apple Intelligence partnership with ChatGPT. One day later, that board seat, along with Microsoft's observer board seat, have been wiped away as a preemptive move to remove oxygen from growing regulatory scrutiny.

Here’s the Financial Times:

“Microsoft has given up its seat as an observer on the board of OpenAI while Apple will not take up a similar position, amid growing scrutiny by global regulators of Big Tech’s investments in AI start-ups.

Microsoft, which has invested $13bn in the maker of the generative AI chatbot ChatGPT, said in a letter to OpenAI that its withdrawal from its board role would be ‘effective immediately’.

Apple had also been expected to take an observer role on OpenAI’s board as part of a deal to integrate ChatGPT into the iPhone maker’s devices, but would not do so, according to a person with direct knowledge of the matter. Apple declined to comment.

OpenAI would instead host regular meetings with partners such as Microsoft and Apple and investors Thrive Capital and Khosla Ventures — part of ‘a new approach to informing and engaging key strategic partners’ under Sarah Friar, the former Nextdoor boss who was hired as its first chief financial officer last month, an OpenAI spokesperson said.”

We do have some deflection on Microsoft’s end. Instead of blaming regulatory scrutiny for giving up its board seat, Microsoft is saying the seat was actually no longer needed. Giving up the board seat just as regulators examine the ins and outs of having the board seat is just a coincidence?

As for that regulatory scrutiny, the item that seems to be at the crux of the issue is EU and U.S. regulators looking

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Neil Cybart 6/12/24 Neil Cybart 6/12/24

Breaking Down the ChatGPT / Apple Intelligence Integration, Is OpenAI Paying Apple?, Why Apple’s ChatGPT Integration Is Genius

Hello everyone.

I underestimated the amount of notes that I have for Apple Intelligence. In addition, Apple’s Platforms State of the Union, aimed at developers, offered an interesting look at Apple Intelligence. There are then questions coming in from members regarding Apple’s stock price move (+10% in two days).

Here’s the game plan:

Today’s focus will go over the Apple Intelligence / ChatGPT integration. While Apple didn’t dedicate much stage time to the news, there are many implications to consider.
For tomorrow, there is value found in spending time on the details regarding how Apple Intelligence functions. We will also talk about some of the Apple Intelligence features tomorrow. We will then address AAPL price action.
We will get to everything else from the WWDC keynote on Monday. This is not due to those items lacking interest. Instead, it’s just tough to reach everything in short order. There were also a few observations from Apple Park.

Let’s begin.

Breaking Down the ChatGPT / Apple Intelligence Integration

Heading into the WWDC keynote, reports had pegged Apple as announcing an agreement with OpenAI. None of the reports contained many details though. Bloomberg said the deal would amount to Apple offering a popular chatbot. Others said OpenAI would play a central role in Apple’s AI announcements.

Just two minutes off the 39 minutes given to Apple Intelligence went to ChatGPT integration news. OpenAI CEO Sam Altman was in the viewing audience for the taped presentation at Apple Park. He did not make an appearance on the digital state.

Apple framed third-party model integration with Apple Intelligence as a way to offer Apple users external models that have broad world knowledge or domain expertise. Apple referred to ChatGPT as “the best of these [external models], the pioneer and market leader..."

The ChatGPT / Apple Intelligence Integration involves two delivery mechanisms:

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