Apple Inc. AAPL is reportedly in talks with Alphabet Inc.’s GOOG GOOGL and ChatGPT-parent OpenAI to license their generative AI models — with billionaire investor Chamath Palihapitiya expressing concerns about Cupertino’s shift from electric cars to AI.

The Shift: On Monday, Canadian-American venture capitalist Palihapitiya shared his thoughts on X (formerly Twitter

He highlighted that voice and text will play a crucial role in shaping internet functionalities — even more so than images.

Palihapitiya remarked, “If Apple with all their resources has to turn to a third party for AI interface (as reported), it poses significant implications.”

Drawing parallels with Apple’s exit from the automotive sector, he suggested that this move signifies a potential abandonment of AI development, equating it to surrendering altogether.

He warned of the impact on Apple’s talent pool, product quality, revenue, and profit, emphasizing the risks associated with this decision.

In conclusion, Palihapitiya labeled Apple’s actions as an “unsound business decision.”

Significance: Earlier reports indicated Apple’s discussions with Google to use Gemini for new iPhone functionalities. A similar negotiation with OpenAI is reportedly underway.

Moreover, recent news revealed Apple’s strategic reassignment of nearly 2,000 employees from its EV project, Titan, to the generative AI division—a move expected to lead to layoffs.

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