OpenAI and ‘incomplete alliance’ with Microsoft and Apple

A year ago, OpenAI was still the most prominent in the artificial intelligence race thanks to its GPT products that were adopted by hundreds of millions of users. Meanwhile, most competitors have to spend billions of dollars building models or recruiting personnel to try to catch up.

But after a year, everything turned around. OpenAI is competing strongly with rival Anthropic, a company built by a group of former OpenAI employees and focused on enterprise customers. OpenAI CEO Sam Altman continuously restructures the leadership apparatus, but is considered to have not seen clear results. Most recently, the company was taken to court by its largest partner, Apple.

Theo Business Insiderthe lawsuit attracts great attention as one of the world’s most powerful companies is taking one of the world’s most valuable AI startups to court. This is the second time OpenAI has allied with a tech giant and the breakup resulted in a messy one.

The first rift occurred with Microsoft, OpenAI’s most important ally when it was first established. The American software company poured a billion USD into this startup in 2019, shortly after Elon Musk stopped investing and left because of conflicts. In 2023, after ChatGPT exploded, Microsoft continued to invest 13 billion USD.

Microsoft also protected Sam Altman when he was suddenly fired at the end of 2023. Satya Nadella, CEO of Microsoft, is considered the most effective supporter in negotiations to reinstate Altman as CEO.

The close relationship helps Microsoft become the “exclusive agent” in exploiting OpenAI’s computing power, programming interfaces, products and a series of research. But at the end of April, the two announced a new agreement, officially ending the exclusivity period between the two sides. OpenAI is now free to provide and commercialize AI models outside of the Microsoft ecosystem, while limiting revenue sharing. Although Microsoft still holds the role of strategic partner, providing cloud infrastructure for OpenAI and benefiting from the value of the investment, Bloomberg assessed that both “have basically ended cooperation”.

The agreement came weeks after Financial Times said Microsoft is considering legal action related to the $50 billion cloud computing deal between Amazon and OpenAI. The American software company believes that the company behind ChatGPT violated the contract by partnering with an unauthorized third party.

According to experts, the Apple – OpenAI story is not a “copy” of Microsoft – OpenAI, but there are some similarities. In 2024, when it first cooperated with Sam Altman’s company, Apple gave many compliments to its partner and introduced ChatGPT into products that already had billions of users – a move that was considered a win for both.

But then, OpenAI made a move that made Apple unhappy. The company acquired IO, the AI ​​device startup of former Apple vice president Jony Ive, for $6.5 billion, and announced plans to build a hardware device that would somehow compete with the iPhone.

In the lawsuit, Apple accused OpenAI of stealing business secrets to develop devices by deploying a widespread campaign to seize and take advantage of its confidential information through former employees, recruitment processes and relationships with component suppliers. Two former Apple employees mentioned in the lawsuit include Chang Liu, a former senior intelligence systems engineer, and Tang Yew Tan, who served as vice president of iPhone and Apple Watch product design. The lawsuit even lists more than 400 Apple employees who have switched to working for OpenAI over the years.

This is not the first time Apple has used the court system against a potential iPhone competitor. They have done the same thing with Samsung since 2011. However, the fact that the company chose to end its relationship with OpenAI by taking each other to court shows that the two had irresolvable conflicts.

Some technology sites assess that partners’ dissatisfaction with OpenAI also comes from Sam Altman’s leadership style. Previously, a lot of information described this CEO as having an “inconsistent” way of working. For example, investigation by New Yorker conducted in April showed that he was evaluated by former colleagues and partners as being difficult to grasp and inconsistent in his communications.

Theo Business Insiderwhatever the reason, establishing an important alliance with two technology “giants” but ending in discord shows that OpenAI is “having problems” with its partners.

Jim Cramer, a famous American presenter and financial expert, said that OpenAI may be the worse party when taken to court by Apple. “I feel like this is a heavy lawsuit, because it’s not something Apple usually does,” he said on the show Squawk on the Street belong to CNBC July 13. “Apple has very good legal advisors. They don’t tend to litigate just for the sake of it.”