But now, according to Bloomberg, another non-voting observer is coming: Apple, as represented by App Store chief Phil Schiller. Apple hasn’t invested anything into OpenAI, but it is integrating OpenAI’s models into its devices (for free) and Schiller’s role is reportedly part of that agreement.

It’s not hard to see how the situation may become awkward, as Microsoft and Apple are longstanding rivals that will soon both be using OpenAI’s models to power AI assistants on their competing products. Even by the excessively cozy standards of the U.S. AI sector, this may be too close for comfort. There will have to be a lot of recusing going on during certain board discussions, and that might not be enough to make this work.

But even without considering the potential for future disputes too deeply, there’s quite a lot to digest about the immediate implications of letting Apple observe OpenAI’s board meetings.

The first and most obvious point is that both parties in the Microsoft-OpenAI love-in are increasingly hedging their bets. It’s been clear for a while that Microsoft is doing this—unsurprisingly, given last year’s turmoil. It absorbed key staff from the AI startup Inflection in March and is now reportedly developing a GPT-rivaling AI model of its own, with Inflection cofounder Mustafa Suleyman leading the effort.

Recently, there have also been hints of OpenAI asserting its own independence in the relationship. The Information reported last week that OpenAI is now making more revenue from directly selling access to its models than Microsoft is making doing the same thing. Building ChatGPT into MacBooks and iPhones is also a big deal, but giving Apple an observer role would confirm that OpenAI and Microsoft are not as tightly intertwined as once seemed the case.

Conversely, the reported development also suggests that Apple may not be hedging its bets as much as it appeared to be doing just a few weeks ago.

It didn’t bring Altman on stage for the announcement of the Apple-OpenAI partnership—he was in the audience—and reporting since then has suggested that Apple may yet also incorporate Google and Anthropic’s AI models into its platforms, as alternatives to OpenAI’s ChatGPT. But unless it also plans to take observer roles on each of those companies’ boards, Apple seems set to give OpenAI and its technology an elevated status for a long while yet.

This may also say something about Apple’s progress in developing its own top-tier AI models, which should obviate the need for any such partnerships—when they appear, and if they prove competitive.

I asked all three companies for comment, but none has been forthcoming. More news below—and see you on Friday, as Data Sheet will be taking tomorrow off for the U.S. holiday.

David Meyer

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NEWSWORTHY

Tesla shipments. Tesla announced its quarterly sales numbers yesterday and, while deliveries were down 5% year-on-year to 444,000 vehicles, they were a little better than what Wall Street expected (440,000 or fewer) and also represented a 15% increase from Q1. As the Washington Post reports, the news lifted Tesla’s share price by over 10%.

EU vs Temu and Shein. Much like in the U.S., there is official concern in the EU about the flood of cheap products coming from Chinese e-commerce platforms such as Temu and Shein. Now, according to the Financial Times, Europe is considering closing off the loophole that allows such platforms to ship their goods at such low cost: the “de minimis” rule that says low-value goods (the EU’s threshold is €150 or $161) can be imported without the need to pay duties.

Figma’s AI boo-boo. The user-interface design service Figma has disabled its AI-powered tool for designing apps after it emerged that asking it to make a weather app repeatedly produced an apparent rip-off of Apple’s Weather app. As The Verge reports, Figma denies heavily training its AI on existing apps; it says it used OpenAI’s GPT-4o and Amazon’s Titan Image Generator G1 models. Either way, this can be chalked up as yet another controversy involving an AI seeming to regurgitate training material that someone else spent time and effort creating in the first place.

SIGNIFICANT FIGURES

48%

—The increase in Google’s carbon emissions between 2019 and 2023, according to the company’s latest environmental report, which pinned the blame on “increases in data center energy consumption and supply chain emissions.” Google is trying to halve its emissions from the 2019 base year by 2030, but says energy-hungry AI creates “significant uncertainty” around achieving the target.

IN CASE YOU MISSED IT

Meta banned from mining data to train its AI models in Brazil, by the Associated Press

Elon Musk got his mega-pay package, but Marc Benioff might not be so lucky, by Chloe Berger

A former OpenAI researcher sees a clear path to AGI this decade. Bill Gates disagrees, by Jeremy Kahn

Steve Ballmer, who was once Bill Gates’ assistant, is now richer than his onetime mentor, by Marco Quiroz-Gutierrez

Revolut billionaire Nik Storonsky embraces AI by launching ‘truly systematic’ $200 million VC firm, by Bloomberg

Why Universal Hydrogen folded—and why the company’s mission will live on, by Allie Garfinkle

BEFORE YOU GO

Floppy-free Japan. Japanese Digital Minister Taro Kono has proclaimed victory in his war against the use of floppy disks in the government’s systems. Floppy disks were once the most common form of portable data storage, but that hasn’t been the case for over two decades now, and for most of the world they live on only as the thing that “save” icons are trying to depict. According to Reuters, Kono’s ministry was set up during the COVID-19 pandemic, when Japan’s reliance on archaic office technology became particularly troublesome. Kono, who took the reins in 2022 after a failed bid to become the country’s leader, would also like to wean the civil service off fax machines.