Apple gets board observer seat in OpenAI deal, Bloomberg reports

• Apple is getting an observer role on OpenAI’s board of directors as part of the companies’ partnership, according to Bloomberg.
• The deal elevates Apple to Microsoft’s level among AI startups, the outlet said.
• Phil Schiller, head of Apple’s App Store, has reportedly been tapped for the job.

Apple has been granted an observer seat on its board as part of its landmark deal with the AI ​​giant, Bloomberg reported Tuesday, citing people familiar with the matter.

According to the outlet, the deal puts Apple on equal footing with OpenAI’s biggest backer, Microsoft, raising new questions about how competitors will coexist within OpenAI.

The details of the new deal follow Apple’s announcement last month that it would be integrating OpenAI’s ChatGPT into future devices as part of a broader AI program at the tech company. Users who prefer not to use ChatGT will be able to opt out of the features, Business Insider reported.

Phil Schiller, Apple’s App Store chief and former marketing executive, has been tapped to serve on the board, Bloomberg reported. Schiller will serve in an observer role, meaning he won’t have voting rights, but he will be able to attend OpenAI meetings, giving Apple a critical look at the AI ​​company’s inner workings, the outlet reported.

Neither Apple nor OpenAI immediately responded to a request for comment from Business Insider.

“This would be a smart move for Cupertino given how important OpenAI is to Apple’s broader AI vision,” Wedbush analyst Dan Ives told Business Insider.

The deal, the details of which remain unclear, is expected to begin later this year, and Schiller has not attended any meetings so far, according to the Bloomberg report.

Microsoft has long been OpenAI’s primary backer and key commercial partner, having invested billions of dollars in the AI ​​company. Before the Apple-OpenAI integration announces that Microsoft CEO Satya Nadella met with OpenAI CEO Sam Altman to discuss concerns about the upcoming deal with Apple, The Information reported in May.

However, Apple’s partnership with OpenAI could also benefit Microsoft, as Venture Beat reported last month. The deal could give Microsoft a Trojan-horse-like look at Apple, one of its main competitors, and pave the way for friendlier relations between the two rivals.

It’s not uncommon for board observers to leave meetings where sensitive information is discussed — something Microsoft could ask Apple to do or vice versa, Bloomberg reported.

The partnership with Apple marked a massive win for OpenAI, coming at a key moment for Altman following a series of scandals at the company, including a coup, growing concerns about AI safety and a spat with Scarlett Johansson over the use of her image.