OpenAI COO Talks Screenless Devices, OpenAI’s Strategy Document From 2024, Apple Appeals EU Interoperability Rules
Happy Tuesday.
My original plan to finalize Monday’s update after spending a few hours at the local amusement park for an end-of-year school event didn’t exactly go to plan. I can say with confidence that I have officially reached the “Dad probably should think twice about going on that ride” age. What was supposed to be Monday’s update is now ready. We will simply shift the updates back a day this week.
My new audio podcast, AVALON, launches today. The first episode will likely be out by time you read this email.
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Let's jump into today's update with OpenAI.
OpenAI COO Talks Screenless Devices
Here’s the WSJ:
“OpenAI Chief Operating Officer Brad Lightcap said the AI revolution has ushered in an opportunity to create a new set of devices.
Lightcap, speaking at The Wall Street Journal’s Future of Everything event on Thursday, said that OpenAI is focused on building AI that is ‘truly personal.’
Right now, users access ChatGPT through web browsers and apps on a smartphone. OpenAI wants to build an ‘ambient computer layer’ that can detach people from always having to be looking at a screen, he said. ‘There’s a lot that we have to do to develop models to succeed in that environment.’
Lightcap said he has ‘no idea’ what device Chief Executive Sam Altman is working on with former Apple designer Jony Ive. The pair announced earlier this month that OpenAI is acquiring Ive’s company io in an all-equity deal that values it at $6.5 billion."
This 28-minute interview (available here via YouTube) provided a good summary of how OpenAI is thinking about business strategy. One reason the talk jumped out at me is Lightcap didn’t come across as trying to sell me something which is common in many AI-focused chats and talks.
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OpenAI’s Spring Update Event, GPT-4o, Apple Hardware at the OpenAI Event
Hello everyone.
Let's jump right into today's update.
OpenAI’s Spring Update Event
In what may become an annual tradition, OpenAI held a spring event to unveil ChatGPT and GPT-4 updates. GPT-4 is OpenAI’s multimodal large language model. The event took place just one day ahead of Google’s annual developer conference and about a month ahead of Apple's WWDC.
The livestreamed presentation (available here via YouTube), which appears to have taken place at OpenAI’s headquarters in San Francisco, had an audience consisting of two to three dozen people. Judging from the applause, the crowd was comprised of OpenAI employees. OpenAI CTO Mira Murati kicked things off and then guided the presentation along.
Murati anchored the event around three updates:
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More on the Mac, Judging Mac Sales, Assessing Mac Success
Hello everyone. It feels good to be back in the swing of things.
As it turned out, the OpenAI saga reached something of a temporary lull right before Thanksgiving last week. Sam Altman was reinstated as CEO but with a new board not of his preference (Adam D'Angelo, Larry Summers, Bret Taylor). In going back over last Monday’s update, there isn’t much that needs to be changed or updated. Some of the latest reporting, which appears to be accurate, had Altman recently trying (unsuccessfully) to make inroads in gaining board control. Such action would likely have played a role in the subsequent boardroom drama. As we discussed, the “we are moving to Microsoft” development was then a negotiation tactic on Altman’s part. If there are any new twists and turns that jump out at me, we will revisit the subject.
Two quick notes:
Last week, a new Above Avalon Report, "The State of the Mac," was published. As a reminder, an audio version of the report was also recorded and released to members with the podcast add-on attached to their membership. To get the add-on, fill out this form.
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Today’s update will cover some of the member feedback and questions that came in about the report.
More on the Mac
For the past 18 to 24 months, Mac and iPad results have led to some head-scratching.
Revenue growth rates for both product categories have been all over the place. On a quarter-to-quarter basis, it may be difficult to make sense of it all. Supply interruptions, combined with channel inventory shifts and different product launch timing have added noise to the mix. However, looking at unit sales on an annual basis, things become clearer to see. iPad unit sales were down 7% in 2023 (my estimate) while Mac unit sales were down an adjusted 10% or so (my estimate). Actual Mac unit sales were down closer to 25% due to one-time issues at the end of FY2022 / start of FY2023.
In what will likely catch many people off guard, Mac unit sales in 2023 were at the same level as they were in the mid-2010s, years before the Apple Silicon transition. Even after we adjust sales to reflect one-time factors, we are looking at a sales run rate that is just 10% higher than 2014 to 2017 sales. This leads to an obvious question: Why hasn’t Apple Silicon led to stronger Mac sales?
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Payment is hosted by MoonClerk and secured by Stripe. Apple Pay and other mobile payment options are accepted. After signup, use this link to update your payment information and membership status at any time.
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The OpenAI Saga, AI Shortcomings and Apple’s Opportunity
Happy Monday.
The tech news flow had no interest in taking a breather ahead of Thanksgiving this year.
In today’s update, we will talk about the OpenAI situation which is still unfolding as of Monday afternoon. There are some connections to Apple when it comes to the broader AI space.
Let's jump into today's update.
The OpenAI Saga
There are some tech news stories that simply need time to pass before taking a deep dive into them. That applies to OpenAI, the AI start-up responsible for kicking off the generative AI buzz/hype cycle with ChatGPT. Some of the OpenAI drama ends up being irrelevant to these updates. However, there is enough here, especially with Microsoft’s involvement that would be of interest to Apple. Once more time passes, we can revisit the takeaways.
Here’s a very quick recap of what happened.
This past Friday, OpenAI's board fired co-founder and CEO Sam Altman. As part of the board’s decision, co-founder Greg Brockman, who was Open AI’s chairman and president, was booted off the board. He quit instead. This kicked off something of a social-media fueled frenzy involving Altman and Brockman trying to return to OpenAI via an employee and investor uprising. Instead, both announced they would head to Microsoft. OpenAI employees are now pledging to do the same.
Here are a few of my prevailing thoughts:
1) Blindspot. In what may end up being the biggest lesson from this drama, Sam Altman had a major blindspot in terms of not having firm control over the OpenAI board. While there is an unusual governance hierarchy at play when it comes to the OpenAI board and its responsibilities (described below), Altman should have known that the possibility of being fired existed. This was not a Black Swan event, although most will say it was. The fact that the OpenAI board was not reinforced after key departures (Reid Hoffman etc.) to be closely aligned with Altman was a huge mistake on his part.
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