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Apple Reportedly Gains Observer Seat on OpenAI Board

Apple is reportedly taking an observer position on new artificial intelligence partner (AI) OpenAI’s board.

This new role came as part of last month’s deal between the two tech companies to integrate OpenAI’s ChatGPT into Apple products, the Financial Times (FT) reported Tuesday (July 3).

Phil Schiller, the head of Apple’s App Store and longtime member of its executive team, is set to represent the company in the observer role later this year, the report said, citing a source with knowledge of the matter. 

PYMNTS has contacted Apple for comment but has not yet received a reply. An OpenAI spokesperson declined to comment.

According to the report, this role lets Schiller attend board meetings but not vote on company decisions, a similar position to that of rival Microsoft, which was also named a non-voting board member last year. Microsoft has invested roughly $13 billion in OpenAI.

The company’s board has undergone a shakeup in recent months, following the whirlwind firing and rehiring of OpenAI founder/CEO Sam Altman in November 2023. 

Apple and OpenAI had been discussing a possible partnership for months before the iPhone maker made it official last month when it rolled out plans for its “Apple Intelligence” AI project. 

As part of that effort, the company plans to integrate OpenAI’s ChatGPT 4o into its iOS, macOS, and iPadOS operating systems.

ChatGPT 4o will be ready, PYMTS wrote at the time, “to tag in when Siri taps out (with your permission, of course). While Apple is starting with the crème de la crème of chatbots, it promises to play nice with other AI models down the line.”

Days after the announcement, a report by Bloomberg News revealed that the terms of the partnership mean that rather than Apple paying OpenAI, the larger company believes that exposing OpenAI’s brand and product to its hundreds of millions of users is of equal if not greater value than a monetary deal.

The report notes that this partnership could cost OpenAI, as it needs to pay Microsoft to host ChatGPT on that company’s cloud network. The more users ChatGPT gets, the more OpenAI’s expenses grow, with the integration into iPhones having the potential to balloon the company’s computing budget.

Meanwhile, PYMNTS wrote last month that the collaboration between the two companies is similar to the ones playing out in the banks/FinTech space.

“The classic dilemma of whether to build an in-house solution, buy a ready-made product or form a partnership to integrate new technologies has been a cornerstone of business development for decades, but the importance of partnering with third-party vendors has increasingly come to the forefront,” that report said. 

“The fast-paced evolution of technology and the rising complexity of consumer expectations adds layers of intricacy to this decision.”