Apple’s Subtle A.I. Strategy May Include a Major Investment in OpenAI
Apple is reportedly eyeing a major investment in OpenAI, along with Nvidia (NVDA), that would value the ChatGPT maker at a whopping $100 billion, The Wall Street Journal first reported yesterday (Aug. 29). The fundraising round will also involve Microsoft (MSFT), currently OpenAI’s largest corporate backer, according to the Journal. Compared with its Big Tech peers, Apple has historically been much quieter about its A.I. plans. But that doesn’t mean the company hasn’t been bolstering its investments in the field through a combination of startup acquisitions and strategic partnerships.
During its Worldwide Developers Conference in June, Apple CEO Tim Cook unveiled the company’s first suite of A.I. offerings, known as Apple Intelligence. Cook also announced a partnership with OpenAI that will integrate ChatGPT across various Apple products. Apple’s ties with OpenAI were further strengthened when the iPhone maker nearly joined the startup’s board with a nonvoting seat, although both Apple and Microsoft have since withdrawn from their OpenAI board roles as the involvement draws antitrust scrutiny.
Apple approaches A.I. differently than its Big Tech peers
Apple’s potential backing of OpenAI is a seemingly unusual move for the Big Tech player, which has made a limited number of startup investments since its 1974 establishment. Of the 30 investments it has made over the past few decades, only three have been A.I.-related, according to data from Crunchbase. These include a $2.5 million investment in Adobe in 1984 and participation in funding rounds in 2016 for Volley, an enterprise machine learning platform, and Chinese ride-hailing giant DiDi, the latter of which saw Apple invest $1 billion.
While Apple may not be the most prominent investor in A.I., it has been quietly building up an arsenal of companies working on the technology. Between 2017 and September 2023, Apple reportedly acquired a total of 21 A.I. startups—making it the top A.I. startup purchaser and far exceeding the number of companies acquired by its rivals. Global consulting firm Accenture acquired the second-highest amount at 19, while Microsoft came in third with 12.
Apple’s acquisition roster includes the likes of WaveOne, a California-based startup using A.I. to aid in video compression, and AI Music, a U.K. company generating music with the technology. This year, Apple has acquired DarwinAI, a Canadian company specializing in using A.I. to improve manufacturing, and Datakalab, a French startup specializing in A.I. compression and computer vision.
Cook addressed Apple’s subtle strategy while speaking to analysts during an earnings call last year. “Of course, we’ve been doing research across a wide range of A.I. technologies, including generative A.I., for years,” he told analysts in August 2023 when asked why Apple is more silent than competitors on its A.I. investments. “As you know, we tend to announce things as they come to market. That’s our M.O. and I’d like to stick to that,” he added.