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Apple gained an observer seat on the company’s board of directors as part of a landmark deal with the AI giant. Bloomberg The company reported the news on Tuesday, citing people familiar with the matter.
The deal puts Apple on an equal footing with Microsoft, OpenAI’s biggest backer, according to the media, raising new questions about how the two companies will coexist on OpenAI’s board of directors.
Details of the new arrangement come after Apple announced last month that it would integrate OpenAI’s ChatGPT into future devices as part of the company’s AI push, Business Insider previously reported. Users who don’t want to use ChatGT will be able to opt out of the feature.
According to Bloomberg, Apple’s App Store chief and former marketing chief Phil Schiller was selected as a director. According to the media, Schiller will act as an observer and will not have a voting right, but will attend OpenAI meetings and provide Apple with important information about the internal affairs of AI companies.
Neither Apple nor OpenAI immediately responded to Business Insider’s requests for comment.
“This would be a smart move for Cupertino, given how important OpenAI is to Apple’s broader AI vision,” Wedbush analyst Dan Ives told Business Insider.
Bloomberg reported that details are still fluid, but the deal is expected to get underway later this year and that Schiller has not yet attended any meetings.
Microsoft has long been one of OpenAI’s biggest supporters and key business partners, investing billions of dollars in AI companies. Ahead of the announcement, Microsoft CEO Satya Nadella met with OpenAI CEO Sam Altman to discuss concerns about the upcoming Apple deal, The Information reported in May.
But Apple’s partnership with OpenAI could ultimately benefit Microsoft, VentureBeat reported last month: The deal could give Microsoft a Trojan Horse of insight into its main competitor, Apple, and pave the way for a warmer relationship between the two companies.
It is not uncommon for board observers to withdraw from meetings where confidential information is discussed, and Microsoft has sometimes asked Apple to do so and vice versa, Bloomberg reported.
The partnership with Apple is a major win for OpenAI and comes at a key time for Altman after a series of scandals within the company, including a corporate coup, growing concerns about safe AI and a controversy over the use of Scarlett Johansson’s likeness.