Amid Tesla Inc. TSLA and SpaceX CEO Elon Musk's public criticism of the partnership between Apple Inc AAPL and ChatGPT-parent OpenAI, a company he co-founded in 2015, analysts appear to agree with his concerns, revolving around data security and privacy issues.
What Happened: On Monday, at WWDC 2024 keynote, Apple announced its partnership with Microsoft Corporation-backed OpenAI to incorporate ChatGPT into iOS 18, iPadOS 18, and macOS 15 Sequoia.
In a series of posts on X, formerly Twitter, Musk announced his decision to ban Apple devices from his companies if the tech giant integrates OpenAI at the OS level.
He also questioned Apple’s ability to ensure OpenAI’s protection of user security and privacy and went on to accuse Cupertino of being oblivious to what happens once they hand over user data to the AI startup.
In one tirade, popular tech YouTuber Marques Brownlee replied to Musk stating that CEO Tim Cook has assured that Apple would not send any user data to OpenAI without explicit user consent.
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Now, analysts Doug Clinton and Walter Piecyk have also expressed concerns about Apple’s ability to protect user data when shared with OpenAI.
While appearing at CNBC’s Last Call segment, Clinton, the managing partner at Deepwater Asset Management, suggested that most Apple users may not care about these potential privacy issues.
“I do think there’s an unanswered question… around how Apple is actually going to protect your data when they do share some of it with OpenAI.” However, he also said that Musk’s views might be influenced by his history with OpenAI.
During the same segment, Piecyk, partner and TMT analyst at LightShed Partners, acknowledged Musk’s intelligence and influence on product perception. “He [Musk] can be polarizing, but obviously, he’s a very smart person,” he said adding, “It just speaks to the perception of the product, and perception becomes reality when you’re talking about a consumer product.”
Why It Matters: In March of this year, Musk filed a lawsuit against OpenAI and its CEO, Sam Altman, alleging that the company had violated the “Founding Agreement.”
OpenAI executives then denied the allegations. Previously, it was reported that in an internal memo, OpenAI's chief strategy officer, Jason Kwon, stated, “We believe the claims in this suit may arise from Elon's regrets about not being involved with the company today.”
Earlier, Altman also addressed this legal development saying that Musk decided to leave OpenAI because of disagreements over the company’s direction. The tech mogul reportedly wanted OpenAI to be acquired by Tesla, a proposal that the company did not support.
“In terms of what Elon’s real motivations here are, I don’t know,” Altman said at the time.
The billionaire entrepreneur launched his AI startup, xAI, in July last year, followed by the release of the company’s first product, Grok, in November.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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