OpenAI's Apple Deal Sparks Concerns In Microsoft, Could Shift AI Market Dynamics

Microsoft Corp MSFT is concerned about some of OpenAI’s business dealings, particularly a potential agreement between OpenAI and Apple Inc AAPL.

Satya Nadella recently met with OpenAI CEO Sam Altman to discuss this deal involving integrating OpenAI services into Apple products.

Nadella’s concerns stem from the potential impact on Microsoft’s product ambitions, the Business Insider reports.

Apple’s deal with OpenAI will solidify Altman’s control over the company after his brief ouster last fall.

Altman, who has pushed out rivals from the board, aims to replace Alphabet Inc GOOG GOOGL Google as Apple’s search partner for Safari and build AI chip factories.

However, Microsoft, a significant investor in OpenAI, is concerned about the impact of the Apple deal on its own AI ambitions, according to the New York Post.

Apple considered both Google and OpenAI for this multi-billion-dollar deal.

If confirmed, this agreement would be a significant win for Altman, who has faced scrutiny from former employees and board members.

Tensions within OpenAI have reportedly been brewing since Altman’s brief ouster in November. An insider revealed to The Financial Times that Microsoft pressured OpenAI to prioritize commercial products, exacerbating existing tensions between executives.

Despite these challenges, OpenAI’s valuation has soared to $90 billion since launching ChatGPT.

Altman is considering converting OpenAI into a for-profit corporation to attract significant capital and expand its AI infrastructure.

OpenAI’s annual revenue crossed the $2 billion mark. The ChatGPT parent eyes doubling revenue by 2025.

Microsoft stock gained over 26% in the last 12 months. Apple gained 8%.

Price Actions: MSFT shares traded higher by 0.06% at $414.93 premarket at the last check Friday. AAPL is down 0.14% at $191.03.

Also Read: Apple’s Potential Partnership With OpenAI Opens Up Revenue Opportunities, Says Tech Bull: ‘The Golden Goose For Cook And Cupertino Was…’

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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