| This interview has been edited for clarity and brevity. Q: In 2024, Apple formed a partnership with OpenAI to integrate ChatGPT into its hardware. Fast forward two years, and Apple sues OpenAI for allegedly stealing trade secrets. What changed? A: Well, it’s not the first time we’d seen this particular playbook. iPhone first launched with a YouTube app and Google [started] as the standard search and Google Maps [platform]. And Apple went on to later sue Google over Android and did its own version of maps. If you go back in two years, Apple was in a pretty nasty spot. It had found itself investing in the wrong technology at a time when the world was moving toward AI. Apple was trying to build a car and spent many billions of dollars on a project that pretty much came to nothing. People were saying, “Well, you know, when it comes to [Apple’s annual conference] WWDC [Worldwide Developers Conference], Apple better have an AI story, and Siri is outdated.” And it appears that Apple scrambled to put something together. It felt like OpenAI wasn’t integrated into Apple’s AI offerings. It was something that was sort of patched in. Two years later, those demos still haven’t materialized. And, in the interim, Apple [took] probably the smartest route. It went back to Google because Gemini has clearly demonstrated to be the market leader right now, certainly for consumer-facing products. It’s also clear that Apple does not like its secrets leaving Apple Park, and it’s not the first time we’ve seen this before. Apple employees who have quit and gone out to other places and have found all sorts ofcreative ways to try and copy proprietary information. Apple, being Apple, often has ways of spotting this type of behavior, tracking it down and treating it mercilessly. It doesn’t take a lot in this world to go from being friends to being enemies, and, who knows, back to being frenemies. We’ve got Apple and Google being buddies again. Q: Apple says OpenAI has now poached more than 400 employees. One thing I wanted to ask is, in your view, how much of what makes Apple’s hardware exceptional lives in the heads of engineers as latent knowledge rather than in documented designs that OpenAI is allegedly having Apple employees bring to interviews? A: Let’s go back to return of [Apple co-founder] Steve Jobs and Apple in 1997. Prior to that, there was this debate among journalists, analysts, pundits: Is Apple a software company or hardware company? When [Jobs] came back, he made it very clear: Apple is a hardware and software company. It’s an integrated company. Apple is at the intersection of liberal arts and technology because it takes all those things to be integrative. It’s the doctors on staff that Apple has that are focusing on the health issues that tie back into the Apple watch and all the algorithms and metrics there. That’s extremely, extremely difficult to do, and we really haven’t seen very many other companies come even close to this. But you get over to a place like OpenAI, and their strength is software. We’ve already seen, though, places like Anthropic [are] better in terms of coding. Gemini [is better] in terms of its overall, capabilities. If you’re OpenAI, you basically want a device that is essentially powered by ChatGPT. The idea of being able to control something end to end that you can sell to consumers as a package in terms of hardware and in terms of software seems like it’s probably a pretty good idea. And, you know, if you’re going to try and do that, the best place poach those individuals is from Apple. But there’s a line. There’s a difference between having a great experience and going from one job to another, [versus] trying to walk away with the keys to someone else’s car. The biggest tech swap was the two Apple alumni who tried to launch the [Humane] AI pin, which some reviewers called the worst technology product ever released. So, there you had two ex-Apple employees with some other ex-Apple people involved trying to build hardware and software with their knowledge, but without the backing of the mothership. It turns out, again, [to be] really, really hard to do, even if you know what you’re doing. Q: Apple alleges that Tang Yew Tan, its former vice president of product design and current chief hardware officer at OpenAI, asked job candidates working for Apple to bring Apple product parts to interviews to gain access to confidential information. But Apple also says “it lacks visibility into what’s been happening behind closed doors at OpenAI, where such misconduct is normalized and exemplified by leadership.” Do you think these are unethical actions by a handful of employees or do you think this goes up to OpenAI CEO Sam Altman and, as Apple says, is “rotten to its core?” A: I think, first of all, it’s Apple literally taking off the legal gloves and reminding others in the industry: If we’re not afraid to go after OpenAI, we’re not afraid to go after you. If I were an Apple engineer and I inadvertently left with some information that I shouldn’t have, I would be doing everything I possibly could to get rid of that as quickly as possible. But let’s be clear: OpenAI has been a weird company. And Sam Altman has been one unusual CEO who was CEO and then was fired — and, 15 minutes later, got a job at Microsoft, and then, 20 minutes later, was back. Who knows what’s going on in those circumstances? In terms of OpenAI, again, Sam Altman’s got the responsibility. Also, people and companies, just as a general rule, don’t go maverick like this. It’s very hard to imagine some hiring person at OpenAI who is encouraging people to bring Apple stuff to interviews. Q: Tech analyst Ben Thomspon said in a recent edition of his newsletter Stratechery that “the AI era has sucked for Apple” and that it is reckoning with a paradigm shift that could threaten their hardware moat. Do you agree with that assessment? Can Apple have a successful AI strategy moving forward? A: Wayne Gretzky is supposed to have said, or was quoted as saying, is, “You don’t skate to where you know the puck was. You skate where the puck is going to be.” Apple was skating to where the puck was three games ago, and everyone has moved on. And the worst part for Apple was every time it tried to make an announcement, the industry was leapfrogging. But the good news is that, for devices going forward, Apple can talk about these new experiences. The early results that I’ve been playing with say that we’re seeing some good stuff here. It’s clearly Gemini underneath. Apple’s done a very good job of integrating Gemini into the Siri experience, so it actually feels like an Apple experience — in the same way that users didn’t care about maps, as in Google Maps or Apple Maps. Whatever maps is on the device, that’s what they’re going to use, and that strategy worked well. This newsletter is published by WP Intelligence, The Washington Post’s subscription service for professionals that provides business, policy and thought leaders with actionable insights. WP Intelligence operates independently from The Washington Post newsroom. Learn more about WP Intelligence. | 
