Can OpenAI really go the way of Apple and capture lightning in a bottle?
Gus Carlson is a U.S.-based columnist for The Globe and Mail.
After OpenAI's series of embarrassing stumbles – including disruptive outages, pesky glitches in its ChatGTP platform, and the bizarre ousting and rehiring of its chief executive officer in a matter of days – the popular artificial-intelligence platform finally got one right.
So right, in fact, that the company has manoeuvred itself into a position to put some blue water between itself and deep-pocketed rivals in the development of AI devices, the way Apple did with rivals in the computer and mobile phone world.
The Apple comparison is not coincidental. Late last month, OpenAI said it planned to acquire an AI device company called io in an all-equity deal valued at about US$6.4-billion. Embedded in the purchase is a secret weapon that goes well beyond the technology: the design legend and io co-founder Jony Ive.
OpenAI recruits legendary iPhone designer Jony Ive to work on AI hardware in $6.5B deal
Mr. Ive is not just another smart techie. He is the design genius responsible for creating Apple's most iconic products, including the iPod, iPhone, iPad and MacBook Air. He also helped design Apple's ultra-modern California headquarters.
It was Mr. Ive's eye for combining elegant simplicity and functionality that set Apple's products apart from all others, first in the world of PCs and then in handheld devices. Even Apple's packaging reflects Mr. Ives's commitment to reinforcing the brand's sleek beauty in every way it touches customers.
So influential was Mr. Ive that Apple co-founder Steve Jobs said he considered him to be his 'spiritual partner' who saw things the same way he did. Mr. Ive was among Mr. Jobs's first hires when he returned to Apple in 1997 after being fired from the company more than a decade earlier. Mr. Ive had a direct and unfettered reporting relationship with Mr. Jobs.
Few would question Mr. Ive's enormous influence on the devices we all use every day. In a post about the io acquisition on X, OpenAI CEO Sam Altman wrote that Mr. Ive is 'the greatest designer in the world.'
OpenAI needs a win. The acquisition of Mr. Ive and io is a crucial strategic play for OpenAI to stay ahead in the generative AI race, where competitors including Google, Anthropic and Elon Musk's xAI are making significant investments and quickly pushing new products to market.
The showdown in AI devices is seen as the next big inflection point for the sector that may drive consolidation and some flame-outs – fates OpenAI seems determined to avoid.
The purchase of io – OpenAI already owns about 23 per cent of the company – is the latest in a recent shopping spree that has seen OpenAI shore up its hardware assets. Just a few weeks ago, it agreed to buy AI-assisted coding tool Windsurf for US$3-billion. OpenAI also acquired analytics database company Rockset last year.
OpenAI has also hired the former head of Meta's Orion augmented reality glasses initiative to lead its robotics and consumer hardware efforts.
OpenAI CFO says new structure opens door for potential IPO
Despite the asset and talent accumulation, OpenAI has some hurdles to clear with its current offerings, as well some reputation issues that continue to dog its credibility.
The company has been plagued by high error rates in its application programming interface (API) and performance problems in ChatGTP.
Users have reported a wide range of gremlins, including slow response times, trouble mining information from source documents, contextual problems and generic responses to queries.
But perhaps OpenAI's biggest black eye came in November, 2023, when its board ousted Mr. Altman as CEO because of concerns about his leadership capabilities and lack of transparency in his communications with directors.
Then, just a few days later, after employees protested the firing and threatened a mass walk-out, Mr. Altman was reinstated as CEO.
An independent investigation concluded that the board's initial concerns about Mr. Altman did not rise to the threshold for termination.
But the damage was done. The chaos in the governance structure dealt a blow to OpenAI's reputation at a time in its young life when it was breaking new ground and trying to establish credibility in the fast-emerging AI space.
If history is any guide, Mr. Ive's eye for the kind of elegant, simple and unique device designs that separated Apple from the pack will give OpenAI an advantage over its bigger rivals.
The big questions are: Can he capture lightning in a bottle again, the way he did at Apple, and will he be given the latitude to pursue the unique creative path that has made him a tech legend?
Based on OpenAI's past governance bungling, Mr. Altman's biggest job is to keep the board out of Mr. Ive's hair and let him work his magic.
If they can manage that, oh, the places they'll go.
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