In a groundbreaking move that solidifies the alliance between Apple Inc. and OpenAI, Apple is set to gain an observer role on OpenAI’s board. This development comes as part of a landmark agreement announced last month, enhancing the ties between these two tech giants, once considered unlikely partners.
Phil Schiller, the head of Apple’s App Store and its former marketing chief, has been chosen for the observer position, according to insiders familiar with the matter. As a board observer, Schiller will not serve as a full-fledged director and will lack voting rights, but he will gain valuable insights into the decision-making processes at OpenAI. This arrangement is slated to take effect later this year, although Schiller has yet to attend any meetings.
Apple’s announcement in June to incorporate ChatGPT into the iPhone, iPad, and Mac as part of a suite of artificial intelligence features marks a significant step in its AI strategy. This board arrangement aligns Apple with Microsoft Corp., OpenAI’s largest backer and primary AI technology provider, which also holds an observer role on the board. The inclusion of both Apple and Microsoft in OpenAI’s board meetings could lead to complex dynamics given their history as both rivals and partners.
Representatives from Apple and OpenAI have declined to comment on the matter. However, the potential for conflict is evident, particularly during discussions on future AI initiatives between OpenAI and Microsoft, from which Schiller might need to recuse himself.
Despite not leading Apple’s AI initiatives, Schiller’s extensive experience and role as a steward of the Apple brand make him well-suited for this observer position. Schiller, who stepped down as head of marketing in 2020 and now holds the title of Apple Fellow, oversees the App Store and manages Apple’s product launch events. He also serves as a director at medical technology company Illumina Inc.
This partnership with OpenAI allows Apple to collaborate with one of the most influential AI startups, known for its cutting-edge technology as well as its controversies. OpenAI CEO Sam Altman was briefly ousted last year due to concerns about his transparency with the board. The company has also faced criticism for downplaying AI safety issues and using a digital voice resembling actress Scarlett Johansson without an agreement.
The integration of OpenAI’s technology is a key component of Apple’s broader AI strategy, which also includes in-house features under the banner of Apple Intelligence. These features can summarize articles and notifications, create custom emojis and images, and transcribe voice memos. A revamped version of Apple’s Siri digital assistant is also part of this initiative, though many enhancements are expected to roll out next year.
Interestingly, the partnership with OpenAI is not a financial arrangement at this time. Instead, OpenAI gains access to Apple’s extensive user base, while Apple integrates a highly sought-after chatbot feature into its devices. Users will also have the option to access a paid version of ChatGPT on Apple devices, potentially generating App Store fees for Apple.
Apple is also in talks with Alphabet Inc.’s Google and startup Anthropic to offer additional chatbots to customers. Discussions are underway with Baidu Inc. and Alibaba Group Holding Ltd. to introduce AI features in China. Apple Intelligence is set to launch initially in American English, with plans for an international rollout to follow.
While top Apple executives often serve as directors for other companies, joining the board of a high-profile partner is a rare move. Apple previously held a board seat at DiDi Global Inc. after a $1 billion investment in the Chinese Uber rival, but the OpenAI observer role signifies a deeper strategic collaboration in the burgeoning field of artificial intelligence.