Apple to receive new board observer role at OpenAI as part of partnership

Apple will receive a board observer role at OpenAI, as part of the agreement between the two companies

The company's current head of App Store development and former marketing chief, Phil Schiller, has apparently been chosen for the new observer role at OpenAI. With the observer role, Schiller will be able to attend meetings at OpenAI but will he will not be able to vote or influence board decisions the same way a board member could.

According to a Bloomberg report on Tuesday, which cites people familiar with the matter, Schiller has not yet attended any board meetings at OpenAI.

Schiller stepped down from his role as Apple's marketing chief in 2020 and was later tasked with overseeing App Store development and new Apple product launches. He was reportedly chosen because of his long-standing career at Apple, even though he has no involvement with the company's latest AI initiative.

In June, Apple announced that it would be offering ChatGPT integration with its latest operating system updates, alongside its own in-house AI features known as Apple Intelligence.

The current arrangement between Apple and OpenAI reportedly does not involve any financial transactions, which would explain Apple's new observer role at OpenAI. Microsoft also has an observer role at the company, which could lead to tensions between Microsoft and Apple, given that the two are often seen as rivals in the technology industry.

Inevitably, some board meetings at OpenAI will deal with matters concerning Microsoft and its arrangements with the company. Microsoft could easily request that Schiller be excluded from meetings where sensitive matters are discussed.

Through its latest partnership with OpenAI, Apple will be able to provide its consumers a way of accessing an in-demand chatbot, while also allowing for additional revenue possibilities in the future. By offering the paid version of OpenAI's ChatGPT, Apple will be able to receive compensation in the form of App Store fees.

OpenAI would, in turn, receive a large boost to its existing user base in the form of longtime Apple users with an interest in artificial intelligence and the features made possible by large language models. Apple is looking to establish similar arrangements with Google and AI startup Anthropic, as part of its broader AI push.

In China, Apple is looking into potential agreements with local companies that have state approval for their AI and LLM technology. Alibaba and Baidu are among the potential partners for Apple in China, as the company plans to expand the availability of its AI features in the future.

Apple's latest set of AI features previewed at WWDC will only be available in US English later in 2024. The international rollout of Apple Intelligence will take more time, as Apple will need to comply with different local laws and address concerns from EU regulators to make this happen.