Apple Inc. AAPL is reportedly in discussions with Alphabet Inc.'s GOOG GOOGL and ChatGPT-parent OpenAI to license their generative AI models — and billionaire investor Chamath Palihapitiya thinks this decision mirrors Cupertino's approach toward electric cars.
What Happened: On Monday, Canadian-American venture capitalists Palihapitiya took to X, formerly Twitter, and said, "Voice will be THE critical ‘front door' for the next gen of the AI powered internet."
He added that voice and text will span a wider range of internet functionalities than any other mode, including images.
"It stands to reason, then, that if Apple with all of their cash and engineering prowess has to rely on a third party (Google or OpenAI) to provide the AI powered interface for iOS (per reporting this morning), a few things are true," Palihapitiya said.
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He said Apple's reported move after their retreat from the automotive sector, suggests that the tech giant might be giving up on artificial intelligence development as well.
"On the heels of giving up on cars, this is them giving up on AI. And giving up on AI is essentially like giving up all together," he said.
He went on to say that the Tim Cook-led company now faces an "increased risk of getting hollowed out," potentially losing its top talent. "This will eventually flow into product quality, upgrade cycles, revenues and profits."
He concluded his views by saying, "It's an unsound business decision."
Why It's Important: Earlier in the day, it was reported that Apple had been in discussions with Google about licensing Gemini to power new iPhone software features. The iPhone maker is reportedly discussing a similar deal with OpenAI.
Meanwhile, last month, it was reported that Cupertino informed its nearly 2,000 employees working on its EV development project dubbed Titan. The company apparently plans to shift many of the employees designated for EV development to its generative AI division; however, layoffs are still expected.
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