How the Apple-OpenAI Deal Could Affect Microsoft and Google

[00:00:00] Zscaler extended its Zero Trust architecture with powerful AI engines trained by 500 trillion daily signals to prevent ransomware and AI attacks that target business. Zscaler Zero Trust plus AI. Learn more at zscaler.com slash zero trust AI. Welcome to Tech News Briefing. It's Friday, June 14th.

[00:00:26] I'm Zoe Thomas for The Wall Street Journal. Engines that harness the power of the sun are getting closer to becoming a reality. We'll tell you what they could be used for and the technological developments making them possible.

[00:00:40] And then OpenAI's deal with Apple is shaking up the competitive balance in the artificial intelligence race. Our AI reporter Deepasitha Raman will tell us how other tech titans are taking the news and what it could mean for relationships between tech's big AI players.

[00:01:00] We're starting up in the air today. Aviation giants, telecommunications companies, venture investors, and military agencies are spending millions of dollars developing solar planes and their technologies. Solar-powered planes could offer emissions-free flight. These aircraft, though, act very differently from today's jetliners.

[00:01:21] Here to tell us more about that is senior reporter Fred Dvorak, who writes about the energy transition and climate for The Wall Street Journal. So Fred, these planes use solar panels for power. What does that mean for how they're constructed?

[00:01:35] One of the first things you have to understand about solar power is it comes from solar panels. They are layered over the wings, which face up and the sun. And in some cases they're put all over the body and the tail of the airplane as well.

[00:01:54] But it's still not that much power. A lot less power than jet fuel. And so they can't go very fast and they can't lift very much. So when you ask what the planes are like, they're very light. They have to stay as light as possible.

[00:02:11] And they have to, in many cases, fly as high as possible because they're very fragile. So they want to fly away from the weather and other things like that. And given all of that, what types of things could these aircraft be used for?

[00:02:27] Most of the aircraft in development now are autonomous. They're flying without people because they're flying in the stratosphere. That's above where commercial aircraft fly and it's way higher than people could tolerate. It's too cold. There's too little oxygen up there.

[00:02:48] And they would be doing everything from surveillance for military operations, for example, or beaming broadband from the skies. Maybe you've got a disaster someplace and you need to provide some emergency broadband services. The companies that are developing prototypes are hoping to roll out some commercial planes

[00:03:13] in the next few years and commercial services. Solar-powered planes have the potential to stay in the air perpetually. What technological developments have made that possible? Well, the key has been the battery because the sun obviously only shines during the day.

[00:03:32] So they have to fly through the night on some other kind of power. And it's recently that batteries have become cheap enough and powerful enough to be able to support that flight throughout the night.

[00:03:49] And even then, a lot of these solar planes, almost all of them use little tricks to stay aloft long enough so they'll fly to really, really high spot and then they'll like glide down very slowly over the night while using the batteries to try and conserve energy.

[00:04:07] That was WSJ senior reporter Fred Dvorak. Coming up, OpenAI landed a deal with Apple. How could that impact other tech titans? We'll explain after the break. Cyber attackers are using AI and creative ways to compromise users and breach organizations.

[00:04:31] In a security landscape where you must fight AI with AI, the best AI protection comes from having the best data. Zscaler has extended its Zero Trust architecture with powerful AI engines that are trained in tune by 500 trillion daily signals.

[00:04:47] Learn more about Zscaler Zero Trust plus AI to prevent ransomware and AI attacks. Experience your world secured. Visit zscaler.com slash zero trust AI. On Monday at Apple's developers conference, the iPhone maker announced a partnership with OpenAI to add its chat GPT to Apple devices.

[00:05:12] Only about two minutes of the two hour presentation was spent on the topic. The deal helps strengthen OpenAI's position at the forefront of the generative artificial intelligence boom. It also raises questions about the startup's relationship with Microsoft, its most important

[00:05:28] tech partner, and it could have an impact on other AI developers. Here to help us unpack what this Apple-OpenAI partnership means for key players in the AI race is our reporter Deepa Sitaraman.

[00:05:41] And a note before we get into this, News Corp, the owner of the Wall Street Journal, has a content licensing partnership with OpenAI. Deepa, what do we know about the details of the Apple-OpenAI deal? What have the companies said about it?

[00:05:55] When we reached out to spokespeople from both companies, they wouldn't tell us any details. What we do know is that Apple will be relying on chat GPT for some of its more complex tasks.

[00:06:11] That is an example of where Apple has taken this extremely rare step of making another company's product very visible within its own. You know, this isn't just apps on the phone where hundreds of thousands of companies are

[00:06:29] all putting out an app and everybody is competing for the phone user's attention. This is a feature that is baked into some of Apple's major products. Most of the analysts I spoke to on Monday said they'd never seen that kind of move from Apple before.

[00:06:48] This deal seems to have gotten under the skin of Elon Musk, who set up a rival AI firm, XAI, last year. What did he say about it? Elon immediately brought up the privacy concerns, especially around could data from iPhones or from Apple users be harvested by OpenAI?

[00:07:11] For its part, Apple says that when you use chat GPT through Siri or through any of its other products, there's no data transfer to OpenAI. There is a change, however, when you upgrade to chat GPT plus and connect those accounts,

[00:07:32] then OpenAI will get a little bit of data about you per usual. And that data would include prompts that you put into chat GPT to find information or get help. Apple was very clear that at least in the basic version of the feature, there will be

[00:07:51] no data shared. Microsoft is OpenAI's biggest investor. Do we know how Microsoft views the Apple OpenAI partnership? I mean, it's also this very interesting twist where Microsoft is also kind of supporting the Apple partnership. OpenAI and Microsoft are supposed to have this incredibly unique special relationship in tech.

[00:08:20] The track record for these two companies and their partnership has been pretty mutually beneficial. At the same time, OpenAI is still the clear winner in the generative AI space, whereas Apple is a really serious contender to Microsoft, especially within the area of consumer technology.

[00:08:42] This is an area where Microsoft really wants to do better. And then for OpenAI to partner with the consumer tech titan and promise to bring its technology to Apple, it got to introduce a little bit of tension at least into the partnership.

[00:09:05] But at the same time, because Microsoft provides computational resources to OpenAI, whenever Chachapiti is responding to some kind of query from an Apple user, that is Microsoft in the background making that happen through its cloud service, which they get paid for.

[00:09:29] So there's a little bit of, you know, they win a little, they lose a little. Has Microsoft commented at all on the OpenAI-Apple deal? They've declined to comment. Let's talk about another company that could be impacted by this deal, Google.

[00:09:44] What does this mean for Google's search on Apple devices and more broadly, Google's own AI efforts? Well, there is a direct threat, which is right now if you ask a question in a Siri, you'll often get a Google result.

[00:09:58] What is interesting now about this partnership is that, you know, at some point the user is asked, do you want me to ask Chachapiti? And if the user says yes enough times, I mean, that's traffic that could have gone to Google

[00:10:13] that is now going to an OpenAI project. So that is a direct hit in terms of the traffic that Google gets. Google also relies on Apple a lot for search traffic in general. It's the default search engine on Apple. They pay quite handsomely for that privilege.

[00:10:38] And so there are broader concerns about whether this Chachapiti tie-up will hurt some of the revenue that has come in from those ads. That said, Apple after the announcement told reporters and others that were in the room

[00:10:56] that there were other companies that they were talking to that could also handle some of the tasks that Chachapiti currently handles around composing messages and other things that are still too complex for some of Apple's in-house models.

[00:11:15] And they specifically said that they were talking to Google about its Gemini model. So Google might still get a position there. That was our reporter Deepa Sitaraman. And that's it for Tech News Briefing. Today's show was produced by Julie Chang. I'm your host, Zoe Thomas.

[00:11:35] We had additional support this week from Melanie Roy. Jessica Fenton and Michael LaValle wrote our theme music. Our supervising producer is Catherine Millsop. Our development producer is Aisha Al-Muslim. Scott Salloway and Chris Zinsley are the deputy editors.

[00:11:49] And Felana Patterson is The Wall Street Journal's head of news audio. We'll be back this afternoon with TNB Tech Minute. Thanks for listening. Zscaler extended its Zero Trust architecture with powerful AI engines trained by 500 trillion daily signals to prevent ransomware and AI attacks that target business.

[00:12:15] Zscaler Zero Trust plus AI. Learn more at zscaler.com slash zero trust AI.