If Apple participates in OpenAI, the cost may be earning $20 billion less from Alphabet
Apple may participate in the financing of ChatGPT developer OpenAI, which could lead to investor concerns about its search agreement with Alphabet. Reports suggest that NVIDIA is also in discussions to join this round of financing, with OpenAI's valuation expected to exceed $100 billion. Analysts at Bank of America pointed out that a significant investment in OpenAI could draw attention to Google's search engine, as ChatGPT may erode Google's market share in search
According to the financial news app Zhitong Finance, a recent research report released by Bank of America indicates that market rumors about Apple Inc. (AAPL.US) potentially participating in the latest round of financing by ChatGPT developer OpenAI may trigger strong concerns among investors regarding the search engine agreement between the tech giant and Google (GOOGL.US).
It is understood that sources familiar with the matter have revealed that the world's highest market cap chip giant NVIDIA (NVDA.US) has been discussing joining the latest round of financing for OpenAI, which could result in OpenAI being valued at over $100 billion. The sources also mentioned that Apple and Microsoft, one of the shareholders of OpenAI, have been in discussions regarding participating in this round of financing. The sources stated that Thrive Capital is expected to lead the financing round with around $1 billion, and NVIDIA has discussed investing around $100 million.
If substantial progress is made in the negotiations, it would mean that the three most valuable tech giants in the world will all support the developer of the groundbreaking AI chatbot ChatGPT. Currently, Microsoft is the largest contributor to OpenAI, having invested approximately $13 billion in OpenAI before the latest round of financing.
Analysts at Bank of America wrote in their research report: "Apple's significant direct investment in OpenAI may raise concerns among investors, as the potential AI partner could be a long-term alternative to Google's search engine, and embedding ChatGPT in iPhones could lead to a sharp decline in search engine usage." "At the very least, Apple's capital injection should help shape the competitive landscape between OpenAI, Google, and Amazon."
Both Google and Amazon are major shareholders of the AI startup Anthropic, known as the "strongest competitor of OpenAI," and OpenAI's ChatGPT and Anthropic's Claude currently have the largest user base in the global AI chatbot field.
According to the agreement between Apple and Google, the latter pays to make the former the default search engine on iOS devices. According to testimony provided by the US Department of Justice in the antitrust lawsuit against Google, in 2022 Google paid Apple approximately $20 billion according to the agreement.
If Apple successfully invests in OpenAI, the on-device version of ChatGPT on iPhones with a large user base may cover more users, potentially changing the preferred search method for iPhone users from Google. This could also lead to obstacles in renewing the agreement between Apple and Google, as Google may no longer pay Apple $20 billion.
Apple has previously established a partnership with OpenAI and announced this at the developer conference in June. The advanced GPT-4o model powered ChatGPT will be integrated into Apple's voice assistant Siri. During the conference, Apple demonstrated that if a Siri user needs to access the AI chatbot ChatGPT, a window will pop up asking the user if they would like to share with ChatGPT On June 10th, Apple unveiled a series of artificial intelligence features at its Worldwide Developers Conference. This new artificial intelligence technology, called "Apple Intelligence," includes AI-powered one-click summary notifications, automatic transcription of voice memos, and Apple's proprietary tool for generating custom emojis.
Within the framework of Apple Intelligence technology, AI chatbots embedded in end-side devices like ChatGPT can be fully integrated with Apple's Siri voice assistant. This integration will allow Apple iOS users to control all functions of a single application (App) solely through voice commands, and to some extent achieve comprehensive linkage and interaction among applications. Siri's role may no longer be just a clumsy formalized voice assistant, but more like a "versatile AI companion."
Compared to general AI large models that rely on cloud computing power, AI chatbots based on local large models on the end-side can enable smartphone users to use products like ChatGPT more efficiently, conveniently, and securely. With the help of end-side AI, it is expected to achieve a "personal AI assistant" that better meets users' individual needs