Key Takeaways
- Mark Gurman said on the Decoder podcast that Apple is “terrified” of the screenless, hockey puck-sized AI device OpenAI is building.
- Gurman says Siri AI has been the gate to Apple’s new product categories, including new AirPods, a new Apple TV, a HomePod, and a smart home hub.
- My take is that Apple’s lack of a frontier AI model of its own caps its growth beyond the iPhone, because those new products lean on partners like Google.
One of the best-connected reporters on the Apple Apple (AAPL) beat says the company is scared.
“I think Apple is terrified of whatever OpenAI is building,” Bloomberg’s Mark Gurman said on a recent episode of The Verge’s Decoder podcast.
So what is OpenAI building? According to Gurman, “It’s a hockey puck-sized AI computer type of device that you talk to without a display.”
That’s a strong word to use about the company that makes the device almost everyone already carries.
The gate just opened
Here’s the part of the interview I keep coming back to. Near the end, Gurman explained why Apple’s pipeline of new hardware has been so quiet:
“Siri AI has been the gate to all of these new product categories. The AirPods were supposed to be out already, the Apple TV, the HomePod, the Smart Home Hub.”
That’s all been delayed for the Siri AI rollout. Now that it’s happened, as he put it: “Floodgates are open.”
That sounds bullish! And in the near term, it probably is.
But it raises the obvious question: Whose AI is behind the gate?
Apple doesn’t own the brain
And that’s a big problem, because it makes them dependent on someone else (in this case Alphabet (GOOGL) for model capability.
This is also a big departure for Apple. Patel summarized the so-called Cook Doctrine as Apple wanting to “own and control every foundational technology that goes into our phones.”
And it’s not for lack of money…
Apple spent over $40 billion on R&D over the last twelve months, but still ended up leaning on Google for the most important technology of the decade.
Isn’t the iPhone doing just fine?
It is. iPhone revenue grew 16% last quarter, so the AI gap isn’t showing up in the numbers investors watch most.
And analysts expect steady growth ahead…
…with revenue projected to cross $600 billion by 2029.
But that’s exactly my worry. The iPhone is a phenomenal, mature business. Growth beyond it has to come from new categories: the AirPods, the home devices, and whatever answers OpenAI’s puck. Every one of those runs through Siri AI, and Siri AI runs on someone else’s model.
Meanwhile, the hottest AI agent around already belongs to someone else. As I wrote recently, Meta Platforms (META)‘s Muse just became the #1 free app on the Apple and Google app stores.
My view is that Apple’s lack of a frontier model caps its growth beyond the iPhone. It can still ship the products, but it won’t control arguably the most important part of them.
“Apple can get this done”
To be fair, Gurman isn’t bearish on Apple. “I do think Apple has the ability to fast follow anything OpenAI does,” he said, adding that “the models are getting commoditized to a point where they can fast follow and have a very effective product.”
His reasoning is that Google and Anthropic would both happily partner with Apple on hardware. “Anthropic has no hardware business. Apple can get this done.”
Which, fair enough. And let’s face it – it’s not like anyone else has really nailed smart glasses (although Meta feels like it’s getting close), so there’s still plenty of time for Apple to deliver something awesome.
But a partner that supplies the brain has leverage. And this is pure speculation, but I’d expect Google or Anthropic to want a meaningful cut of any breakout device they help build.
Apple has been here before, back when it was dependent on Intel. Of course, we all know how that ended. So maybe Apple really does “get this done” in the end.
But – and this is why I think Apple is scared of whatever OpenAI is building…
What if OpenAI figures it all out first? And what if this time really is different, and the first mover wins all?
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