Is the Apple-OpenAI Deal a Stopgap? Elon Musk's Next Move, and the Future of AI Partnerships

Yeah, and it's not artificial intelligence, it's Apple intelligence.

Seems like we're, like, we're heading towards a world where you'll be able to open up your phone and it's actually going to have tons of context about you and know who you are.

Once these features are all rolled out into the tech, I think that's when we really see AI. Like mainstream adoption.

Who's paying for it?

Do you really see Apple Integrating OpenAI at the OS level?

Hey, welcome to the Next Wave podcast. I'm Matt Wolfe. I'm here with Nathan Lands. And on this show, it's our goal to keep you completely looped in on the world of AI. All the latest news, tools, updates, drama, all of that fun stuff. We talk about it here on the Next Wave podcast so that you're always looped in. And today we're talking about the Apple event, WWDC 2024. Apple has been dancing around AI for months and months and months now. Last year when they did wwdc, they literally did not mention the words AI once during that entire event. People sat there and combed through the transcripts. They said machine learning, they said neural networks, they said everything but AI. Well, this year they kind of flipped that. And everything was about AI.

Yeah, Apple intelligence. Yeah. I was pretty impressed with it, though. I mean, I think we. When we had a previous episode, I kind of put my score at, what, like a three or something? In terms of how good I think it was going to be, I think it came out at probably, I don't know, a six, ish. Seven? Yeah, I mean, I thought it was better than I expected because they have their own AI, which I was surprised by. So it's not all just OpenAI stuff. They've got their own LLM. The benchmarks were, you know, look pretty good, similar to GPT4 in several areas. And. And also it seems like they're really, you know, planning on integrating AI into the entire os, like the entire level. It seems like we're like, we're heading towards a world where you'll be able to open up your PH or your Mac and just talk to your device, whether it's like, with voice or text, and it's actually going to have tons of context about you and know who you are and kind of know the kind of stuff you want to do. And I think that's actually going to be one of the first, like, really, really mainstream use cases is when regular people can just talk to their devices and it'll help them do whatever they need to do.

Yeah, no, I agree. I think, I think this event. Well, I don't know necessarily know if this event is what's making AI mainstream, but once these features are all rolled out into the tech, I think that's when we really see AI like mainstream adoption because it's just like in the devices that everybody uses anyway. You know, a lot of the stuff, like a lot of the criticism that Google gets is they have these big announcement fests where it's announcement after announcement after announcement and then rolling out soon, coming summer 2025, you know, coming next year, they make all these big announcements and then we don't get our hands on it. We're like, that looked really cool. It's really impressive. When do we get it? And then when they finally roll it out, we, you know, we get stuff like, hey, you should put glue on your pizza, right?

Yeah, yeah, yeah.

They kind of pulled a Google where every single feature they show they had this like feature after feature after feature. But none of it's, none of it's ready yet. None of it is in the device. None of it we have access to yet. They say Apple Intelligence is coming fall 2024. So still very, very vague. That's like a three month window that it could fall in. And you know, I feel like that's very un Steve Jobs. Like, I feel like when Steve Jobs used to do keynotes like this, he would get up on stage and talk about all of these cool features and all of this new tech that they've built. And then at the end he would say something like, oh, and by the way, it's available for you in stores today. And then the crowd would just go like wild. Right?

Yeah, yeah, the one more thing. And then, oh, by the way, it's actually like out. It's in the store right now. Like, holy crap. You know? Yeah. And, and, and there was an interesting interview with Steve Wozniak, you know, the other co founder of Apple. And they were asking him like, what did you think about it? He's like, oh, it all seemed cool, you know, but I want to actually try it, get my hands on it and see if it actually works and how it works, you know, and he made this, his joke about their like whole, you know, AI, like rebranding that as Apple Intelligence. He's like, I have my own actual intelligence.

Yeah, yeah. Overall with the event, I was, I was sort of impressed, but I was also sort like there was nothing that they showed off that I hadn't seen before. Right. It wasn't like some of the past OpenAI keynotes where they would show off a new feature and I'd just be like, whoa, I didn't see that coming. Like, this is something out of the blue that's completely new, right? Like when we saw Sora for the first time and everybody's like, yeah, whoa, this is such a huge leap from what we get from Runway and Pika and Model Scope and all these other tools that were available for text to video. Right. Everything Apple showed off was like, oh, cool, we've seen that before. OpenAI's done that, Google's done that, Anthropic's done that. Like, whatever we've. Everything that we saw, we've seen before. It's just now like got that Apple flair on it.

You know, the one thing I thought was pretty cool was the whole helping you organize your emails. I mean, that, that was like a thing is like, seemed like a small thing. But actually I thought like, for business people, that's going to be pretty huge and text messages too, and they'll actually learn from that as well. And it's like, like I said, if you're talking to, you know, Siri in the future, it's got to have context too for those emails and text messages, which is exciting. But also then it's like goes into all the privacy concerns. People were talking about this where, like, you know, Apple announced a lot of the same kind of stuff that Microsoft announced. Yeah, when Microsoft announced it, people were like, oh my God. Privacy, privacy. Like, holy crap. They're like, you know, stealing all our information. And then Apple announced very similar things. Everyone's like, this is amazing. I can't believe they're doing this for us.

Apple, I think, has built this reputation of like, we put a big focus on privacy, right? So like they are doing most of the AI inference on device, right? So when you are asking questions, it's trying to do it all on the device. So theoretically you don't even need to be connected to the Internet and you should still be able to have conversations with your AI. But they do have like their own AI cloud that somehow private cloud, fully private, fully encrypted. So it's encrypted onto the device. It's encrypted on the cloud side. Nobody supposedly can get access to it. And then also they have the option for it to send your queries to OpenAI, which they claim is all completely anonymized. It doesn't collect your IP. So even OpenAI isn't getting any data of who is actually asking the question when the question was asked. Big question that I have about all of that is like, how is that getting paid for? Right. Like. Like right now with OpenAI, you can obviously use ChatGPT for free, but it's very limited. I think you get like 10 queries and then it kicks you out for an hour or whatever. Right?

Yeah.

How is it that on device we're going to be able to just have infinite conversations with OpenAI, but even Pro paying members can't have unlimited conversations with OpenAI, so I don't totally know how that part's going to work out yet. They did say you can like connect your API key or your login to OpenAI and you'll actually be able to use your premium features and that sort of thing. But I don't know, there's still a little bit of like ambiguity for me.

Yeah, I mean, we talked about that in the previous episode with Matthew Berman, right. Where we're talking about who's paying for it. Is it. Is OpenAI paying for it or is Apple paying for it?

Yeah, yeah.

You know, I'm, I'm kind of, I'm personally convinced that most likely Apple's paying for it, if I had to guess.

Yeah.

Tim Cook probably met with Sam Altman, Sam Aldman probably showed him what they've got coming and they had to compare it. Right? Like, for sure, Tim Cook talked to Google, he would have talked to Anthropic, he would have talked to everyone and he would have seen their private demos of what's coming next and then whichever one was best, that's the one he would pick. And if he thought that there was no way that Apple was going to catch up anytime soon, that's why he would make an alliance with someone like OpenAI. And so I'm convinced that's what's happened. I'm convinced, like, yeah, Apple had some pretty cool AI that's like GPT4 level and it's like, oh, by the way. Yeah, all the rumors you hear about GP5. Yeah, there's a reason those rumors exist. Yeah, it's gonna be way, way, way better. It's a leap forward, probably coming later this year and then that'd be perfect, right? Because then they would be able to power Siri with that. Like, yeah, they showed some cool demos with updates to Siri, but yeah, you could have a GPT5 powered Siri later this year, which would really blow people away.

When OpenAI did their GPT 4.0 demo, I think everybody saw that demo and went, this is what Siri should have been. This is like what all of us imagined Siri would be. Right? And so I think Apple probably saw that this is just pure speculation. Right? But I feel like Apple probably saw that and went like, yeah, that's what we want for Siri. That's where we want to get to with this. But I don't know. I still think that Apple is the type of company that's going to use OpenAI or Google Gemini or whatever as like a stop gap until they can just build their own version of it just as good. It may be a few years, but I still think they're going to do what they did with intel and then their own Apple Silicon. Right? They're going to use this product until their own product is ready. And then when their own product is ready, they're just going to be like, bye, bye, we've got our own thing now.

Yeah, I agree. That's what they'll try to do. Like I think the question is that'll actually make sense, like, like OpenAI stays so far ahead that yeah, maybe that's the game Apple thinks they're playing is like, oh yeah, we're just going to catch up. But I'm not sure with AI that's how things are going to play out. Right. Because like as soon as AI gets to self improvement, whoever gets that, they kind of win. And if OpenAI, like GPT6 starts improving itself, when Apple's most likely not going to catch up, possibly ever. Yeah.

When you can go into ChatGPT and say, hey ChatGPT, make yourself smarter. And it's like, okay, I just did.

Yeah, yeah.

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Yeah. But I mean, I wonder how that'll work long term. Right? Because like, yeah, they're tapping into those other companies, but they could just like cut people off, like if there's like apps in the app store long term, like AI apps, like they just, they easily just shut anyone off that they don't like. Right. So I do wonder long term how they'll adapt all that. You know, they also rolled out that whole feature where you can use AI to create emojis, I think. Right?

Yeah, yeah, yeah.

And someone was like, when are you gonna see the first, you know, AI emoji you know, Hitler or something like that. I'm like, oh, yeah, sure, they got. I'm sure they've got those kind of things. Like, I'm sure they got like a black list of words and you can't produce.

But yeah, I'm sure, I'm sure it's going to happen probably pretty quickly after normal people get their hands on it, honestly. But, yeah, but I feel like the big sort of like major lawsuit type stuff, they've. They've sort of put quite a bit of risk mitigation in place for that right now.

What, what did you think about that tweet from Elon Musk? Did you see the one where he was talking about, you know, if Apple does this, he's like, this is outrageous. If they do this, like, I'm banning Apple phones from all of my companies and you'll have to not bring. You can't even bring the phone in if you're a visitor.

Yeah, yeah, yeah.

Like, that's like, holy crap.

Yeah, yeah. I mean, my thoughts, my thoughts on Elon at the moment is Elon is the king of engagement farming.

Yeah.

I mean, and he doesn't even need to be the king of engagement farming. He's already. All he has to do is tweet anything and millions of people are going to see it. But I think he likes stirring the pot. I just think Elon loves going on Twitter, X whatever you want to call it, and just stirring stuff up. Like, I just think that's his mo. I don't really think he would ban iPhones. I think a lot of his employees would be pissed off about that. Like, I don't. I just, I can't see him doing that. But he was basically saying, like, if, if it was like, running locally on their phones. Like, what did the actual tweet say?

If they, if they integrate OpenAI at the OS level, then Apple devices will be banned at my companies.

Yeah. So do you really see Apple Integrating OpenAI at the OS level? I. I don't know. I. I have a hard time seeing them do that. I think OpenAI, they're still going to use the API. It's still going to send to the cloud. It's still, you know, it's still gonna go that direction. I don't actually see Apple integrating it at the OS level.

Yeah, he probably watched the video and it was kind of vague about how those integrations are gonna work. And he probably made some really quick assumptions and tweeted this out. I could see him being generally, you know, like, he currently hates OpenAI. That's like now he is like enemy number one, you know. Yeah, I could see him being like paranoid because like, yeah, in theory you could have situations where, yeah, the phones are just like listening to you and like it's feeding into this AI brain. So yeah, you wouldn't want somebody from this company that you hate having a device where it's like feeding information to them. In theory, yeah, yeah, yeah.

I mean, I definitely see where his concern is. I just, I don't see Apple going that direction. You know, Apple teased like right now you can connect to OpenAI with more models coming in the future. So that makes me think that, you know, you're going to ask a question and it'll, you know how it has a pop up now that says, do you want us to send this to Chat GPT? It might have like you set a default, right? Oh, I want my default to be chatgpt. I want my default in the same way, like if you use Safari for instance on your, on your mobile phone, you can go and set the default search engine, right? You could say, I want my default search engine to be Google. I want my default search engine to be DuckDuckGo Bing. Like anybody actually does that. But you could. I think it's gonna be similar to that. I think you're gonna be able to go into like your Siri settings and then say, what's the default large language model you want to use? If we have to send this off to the cloud, it'll give you the options of Gemini, Anthropic, OpenAI. You pick the one of your choice and then it kind of goes and does that in the cloud and then sends the response back.

So, so no X Phone. That was the other thing that for that tweet is start a whole thing on Twitter where people were like her.

That wouldn't shock. I feel like Elon just wants to have his fingers in every industry, so that would not shock me at all.

I mean that could be like the reason. Like you're saying he's like engagement farming to then set up for something like that, right?

Yeah, yeah. Like that's his market research right there. I'm going to tweet this, see what people say about it and if there's enough demand, I'll go build another company around it.

Yeah, I mean, I assume he just really doesn't like this new alliance between Microsoft, Apple and OpenAI.

It's like, yeah, I get that too. But Microsoft and, and Apple are still not like fans of each other, right?

I know. It's a really, It's a really odd relationship, the whole thing. Yeah.

Because supposedly there's rumors that Microsoft is upset that OpenAI is now working with Apple and But there's nothing Microsoft can do about it. And so.

Right.

It's a lot of interesting drama.

Yeah. And there. And there was also that rumor before the event that, like, oh, maybe they're like, building robots together. Because everyone's been saying that Sam Altman is like, hiring people to build robots right now. That's like, that's a rumor in Silicon Valley. And I think there was even a job posting or something about it too. And so, like, well, maybe they're just going to collaborate with Apple. Or. My crazy theory was like, you know, OpenAI invested in that. That robotics company Figure, like, yeah, I would not. I would not be shocked If Apple or OpenAI or someone just snaps up figure and just rolls that up internally to then build robots and then put their AI into it. So I assume now Elon is just seeing all of them as a threat, like, because, like, he's really doubling down on robots, possibly at Tesla. If he actually, you know, if his whole pay package. That's another whole thing that, that's going on right now. But, like, if his pay package gets passed, he'll probably do it at Tesla. If not, I assume he's going to be doing it at XAI and not Tesla, which is going to be dramatic.

I also heard recently too, that the lawsuit that Elon Musk had against OpenAI, he finally dropped it. So there must not have been a whole lot there.

Yeah, well, there was that whole thing where the emails came out too, Right. Where it was showing. It was not exactly as he had painted it, you know, because, yeah, he. Because, because basically he walked away. Right. So it was like they didn't kick him out of the company. He was like, yeah, I want to go in a different direction. You guys disagree? So.

Yeah, well, he basically said, I want control. Right? He said, I want control. I want to be the decision maker. Or I'm out from the Apple keynote. What are just like, to quickly sort of recap it, like, what are some of the things that you thought were like, the coolest things to come out of the keynote?

The. The stuff about like, okay, you can move around the icons on the screen or whatever you put them in. I was like, o. Is this like Steve Jobs would be like, freaking the hell out if he saw that. Like, what, you can just make your thing a freaking mess now? You can just whatever that's like the opposite of what Apple's always been about. It's like, okay, they're basically like my specifying the Apple device now like where you can just like put all this crazy colors and just change everything and.

Well they're Androidizing it, right. They're, they're taking the things that people seem to like about Android and going okay, we'll do that too I guess. Which Steve Jobs would have never taken that path. Right. He would have been like, yeah, everybody else is doing it, we need to find a better way to do it, you know.

Yeah. And it was, it was a lot of stuff around like you know, using Siri and then like the context there too are like oh, it actually knows like I usually make this kind of appointment or I do this. I think they showed a few demos of that kind of stuff and that was interesting to me. But yeah, again that's all like, it's all stuff that's like coming later on and like it's not like a hands on demo or I don't think it was, it might have been but I think a lot of it was pre recorded. Right. So I guess pretty much all of.

The keynote that we saw was pre recorded.

Yeah. So I mean we'll see like when it's actually live like how, because like you know all these things like latency matters, like how many times does it make mistakes? Matters a lot. So like all the demos they're showing, it's very fast and it gets everything right. Like if you get the actual, if you, if it, when you actually use it, if it's slower and it makes a lot of mistakes, well that's a dramatically different thing.

So yeah, yeah, I think, I think the on device stuff will probably be pretty dang fast. I think when it has to go to OpenAI or their cloud it's going to be a bit slower and if you're don't have Internet then you're not going to be able to use those features.

Yeah.

I actually did think, and this sounds silly but I actually did think the calculator app was pretty dang cool on the iPad.

Yeah, people are, people were memeing on it before the event. Right. They were like, yeah guys, it's time to like sell Apple. It's like you know, Steve Jobs watching the new Apple event. It's like we've got a new calculator app.

Yeah, yeah, yeah. But the way they did like the math notes where you could just sort of like write the math problems and it like solves it as it Watches your handwriting and you can draw graphs and charts and it'll find the angles for you and do all that kind of complex stuff. Now, honestly, I don't think I will use that a lot. Like, there's not a whole lot of scenarios where I'm sitting around just like handwriting math on a day to day basis. But I do think it was really cool.

Yeah, I was like hoping they would bring something like that into like the regular notes app. I use this one Japanese app.

They announced that they will. Yeah.

Oh, okay. What did.

Yeah, yeah, they said it's going to be on notes for iPad, iPhone, Mac OS, all of that stuff.

Oh, cool. I mean, because right now I use this Japanese app called Numi, which I kind of like. It's like basically like this really simple notes app where you can also, you can basically have like variables and things like that where you like say, like, oh, this equals this and you can like add up numbers and it's, it's pretty cool. Like you can like do basic code stuff in there as well.

Yeah, I mean, I thought the upgraded Siri features with the context of your phone, right? Like, you've got these companies like Rabbit and Humane that have the AI pen and the rabbit R1 and that kind of stuff. And everybody was like, why do we need a handheld device? I actually, the funny thing is I've got a rabbit R1 right here. It arrived on the same day as the Apple Keynote. So I watched the Apple keynote, I got a ring at my doorbell and my rabbit R1 arrived, you know, months and months and months after I ordered it. Months and months, you know, a month or so after. Everybody said it sucks, but I'm like, I'm not going to cancel it. It's going to be a relic of the future of AI. Like, I just, I'm gonna put it on my shelf and never use it. But one day people will be like, oh, you got one of those? You must have been an idiot at the time. But anyway, the point is I got this the same day they made those announcements. And I feel like Siri, when it rolls out on our phones, will be able to do every single thing this can do, plus more. So it's like, what did we need these things for again?

Yeah, yeah. I mean, you know, it's kind of amazing it's taken them this long to make Siri good. Right? Like, it's been like what, over 10 years now?

And yeah, any, any betting pools on what comes out first between GPT4O, like voice access and Apple's new version of Siri.

I wonder what OpenAI. I think OpenAI, yeah, I assume that's coming. I would bet, like a month or two max. I would assume.

Yeah. Well, somebody, I mean, obviously don't put any weight on this at all, but somebody told me that they asked ChatGPT when the voice feature was coming out, and ChatGPT told them June 16, and they said, they claimed that they asked it in multiple ways, in multiple, like, versions, and did all sorts of stuff to, like, confirm it. And every single time it asked, it kept saying June 16th. So, obviously, take that with a grain of salt, because AI's hallucinate and that's most likely a hallucination. But I bet. I bet we actually do get the Voice features from OpenAI this month, if I had to guess. I bet it's in June.

Yeah. There's been a lot of things where they've said, oh, it's coming out. Then it came out, like, two or three months later. There's been, like, several times that's happened. So that's just. That's why I'm saying, like, a month or two. That's just my gut feeling.

Yeah. So all of this stuff from the keynote is super exciting, really, really cool, really fun to watch. But how. Let's discuss this a little bit. How do we think it's actually going to impact the world? How do we think it's going to impact, you know, normal people? How do we think it's going to impact businesses? Like, where. Where do you think it's going to take the world? Because, you know, we sort of talked at the front of the show about how we believe that this is what's going to make AI mainstream. And I do believe that because it's going to be in, like, one of the most popular devices on the planet. Right. Everybody who has an iPhone is just going to have this AI in it now, and they may not even realize they're using AI. Like, when people are using things like Alexa and Siri, those are very, very, like, archaic versions of AI. I mean, they're technically AI. They're just, like, compared to what we've got today, very archaic versions. And people don't think of those as AI. So it's interesting because I think we might be moving into this world where right now everybody's freaking out about AI. You're either in, like, two camps. You're either like, oh, AI is the coolest thing ever. It makes my life so much easier, or you're in the camp of, like, I hate AI. It's killing creativity. It's making everybody dumber. Don't, you know, kill AI? It's gonna, or it'll kill us. Right. Like those seem to be the two camps that everybody are in. And I feel like this will probably bring that middle ground where people are using it every day but not thinking about it as AI.

That's how I see it as well, is like, you know, right now a lot of people, they, if they know about AI, they're thinking about ChatGPT and then, yeah, that's scary. And it's just text. Or if they, if they don't know that much, they might actually think about Siri. Like, like, like my mom, she was thinking AI is like Siri and she thought state of the art AI was Siri. Right. You know, and so, and, and, and that technology is so outdated and so, so bad compared to what we currently have. So I think for a lot of people it's, it's gonna be shocking when it's just like on their device all of a sudden they, they buy the new iPhone and now they could just talk to it and it understands stuff about them.

Yeah.

And they can also chat with it. I think that's gonna be like the mind blowing moment where they're just like, holy crap, what is this magic? And they're not gonna be thinking about like, oh, is it AI? What's it gonna do to my job? Or whatever. They're just gonna be blown away by the actual magic of the experience, I think. And I think that's where it'll actually really start to go mainstream because it's, it's, it'll be kind of transient beyond just like thinking about jobs or whatever the latest news story is. It'll be just like, this is magical. And I love it. I think it'll be that simple.

Yeah. And I also think, you know, I think a lot of people struggle with what's the practical use case in my life. Right. Like, I think a lot of people look at Chat GPT and go, that's cool, but I'm not writing essays. I don't need it to, you know, write my essay for me. I'm not a YouTuber. I don't need it to write outlines for me. I'm not a blogger. I don't need it to help me write blog posts. You know, they look at stuff like mid journey and stable diffusion and you know, maybe like Sora and some of these like AI video tools and they go, that looks really cool. I don't have a use for that. In my life. But that's really cool that that exists, right? I think a lot of people look at AI and go, oh, that's, you know, that's cool tech that's out there that some people are using. I just don't see how to integrate that in my daily life. I feel like with what Apple showed off, it clicks a little, right? Like what Apple showed off, it's now like, okay, some. I got 10 text messages while I was on this. While I was on a flight, right? I was on a flight from San Diego to New York. I landed, I got 10 text messages. Crap. Well, it'll now prioritize the most important text message for you. It'll most likely it'll be a thing on your home screen that's like, all right, here's what you need to look at now. Save the rest for later, right? Same with like emails. You know, when it comes to email, one of the things we were talking about offline about, you know, Kip and Kieran over on the Marketing against the Grain show, they were having a conversation about how this is going to massively affect marketers, right? Because if your emails are now all getting prioritized to like the most important emails, rise to the top. And the ones that tend to be newsletters or, you know, marketing emails or things like that, those are going to get deprioritized because now your email reader inside of your iPhone is going to read all your emails for you, figure out a quick summary and give you a one sentence summary of what that email's about. So you can quickly decide whether this email is important to read or just archive it without even opening it. Because it's going to tell you that right from the home screen, right? You and I, Nathan, we have newsletters. I've got the Future Tools newsletter, you've got the Lore newsletter that's going to impact us if people go. If they're looking for. If you do a good job with your newsletter, people should be looking forward to those newsletters and opening up. But if you're like a marketer who just like sends affiliate links about, here's the latest, coolest tool you should check out. Buy through my affiliate link. Like a lot of that stuff's just not going to be as effective as it once was because that's going to get deprioritized. Eventually there's going to be an AI that's like, hey, you haven't opened any of this person's emails for the last 10 emails. Do you want me to just subscribe you. Yeah, like, that's coming guaranteed, you know?

Yeah. Yeah, man. I think if you have good quality, you don't probably actually recommend your newsletter because, like, oh, if I read this newsletter every single week, I'm always engaging with it. It'll probably actually, you'll even see it more, if I had to guess. But yeah, if you have the one that's like, yeah, I occasionally click it and it's like, oh, I don't know why I opened it, but, you know, maybe I'll open it again sometime and close it again. That person, they may no longer see that at some point or.