Gene Munster, managing partner at Deepwater Asset Management, predicted that Apple Inc. (NASDAQ:AAPL) will leverage ChatGPT-parent OpenAI for a substantial part of its AI functionalities.
What Happened: According to Munster, Apple's investment in OpenAI could mean that the tech behemoth may not be aiming to build a rival, comprehensive large language model (LLM.)
Instead, the tech giant might rely on Microsoft Corp.-backed (NASDAQ:MSFT) OpenAI, Alphabet Inc.'s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google, and potentially Meta Platforms Inc. (NASDAQ:META) for approximately a third of its AI features in the future.
He also speculated on why consumers might prefer Apple's version of OpenAI. "The answer is Apple can bring in your personal AI into the equation, that will result in a dramatically more valuable AI experience for Apple users."
Munster concluded by saying that Apple could leverage OpenAI's technology to develop innovative devices.
"Apple will leverage tech from OpenAI to create new devices, like AirPods with cameras which would be a game changer in wearables. This would compete with what Meta and Google are building in the smart glasses space," the managing partner stated.
My take on $AAPL investing in OpenAI:
— Gene Munster (@munster_gene) August 30, 2024
1) This is a sign that Apple is not seeing a path where it makes sense to build a competitive, full feature LLM.
2) What that means is they are going to be reliant on OpenAI, Google, and maybe even Meta to deliver about a third of their AI...
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Why It Matters: Munster's comments about Apple's potential reliance on OpenAI for its AI features come after reports of the tech giant's interest in investing in OpenAI.
Earlier this week, it was reported that iPhone-maker was in discussions to invest in OpenAI, the company behind the popular ChatGPT AI chatbot. This investment was part of a fundraising round that could value the AI company at over $100 billion.
However, the potential investment has also re-ignited controversy. Tesla and SpaceX CEO Elon Musk, who co-founded OpenAI in 2015 and subsequently left it in 2018, has questioned the legality of the startup's transition from a non-profit to a for-profit model.
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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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