It was meant to be Google’s big week with its long-awaited artificial intelligence announcements at its annual developers’ conference. But all the glory was hogged by OpenAI’s $6.4bn acquisition of io, the startup founded by Apple design chief Sir Jony Ive.
Ive will take on the same role as head of design for OpenAI as it looks to convert its lead on artificial intelligence into consumer electronics devices.
With a surname that has confounded spellcheckers since his halcyon days designing Apple’s greatest product, including the iPhone, iPad, iPod, and Watch, Ive’s new venture is suddenly seen as a major threat to Apple.
The next generation of gadgets might not look like a smartphone and might not have the same graphical user interface that we’re all accustomed to on a laptop or smartphone. We’ve moved from the desktop to laptops, external mice to trackpads; before the mobile revolution upgraded that interface to touchscreens and our fingers. But, in the age of generative AI, the way we interface with our technology is likely to be our voices. Current GenAI models offer simplistic services that require a text prompt, but newer reasoning models and so-called agentic AI models are much more powerful.
OpenAI CEO Sam Altman tweeted on X about being “excited to try to create a new generation of AI-powered computers”.
“We are obviously still in the terminal phase of AI interactions,” he expanded in a Bloomberg interview. “We have not yet figured out what the equivalent of the graphical user interface is going to be, but we will.”
Neither he nor Ive think the smartphone will suddenly be replaced, but see the trends of how AI use cases are evolving.
“In the same way that the smartphone didn’t make the laptop go away, I don’t think our first thing is going to make the smartphone go away,” Altman said. “It is a totally new kind of thing.”
Ive thinks that “the phone, as it currently is, is a remarkable general-purpose device,” but AI offers “very new ways” to interact with smarter technology that is just emerging.
Altman says, “It will be worth the wait. It’s a crazy, ambitious thing to make.”
Some recent attempts at an AI device – like the Humane Pin – have spectacularly flopped.
Apple, meanwhile, has seen a number of its high-profile design team leave – many of whom have joined Ive at his design firm, LoveFrom, and at the 55-person startup io.
For the first time, there are stories that Apple might be dethroned, while US President Donald Trump late last week threatened it with 25% tariffs unless it started making iPhones in its home market.
“I have long ago informed Tim Cook of Apple that I expect their iPhones that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else,” Trump posted on his own platform, Truth Social.
“If that is not the case, a Tariff of at least 25% must be paid by Apple to the US.”
Apple, having begun May as the most valuable company in the world, lost 3% of its value.
“For the first time in decades,” wrote Bloomberg’s Mark Gurman, ”Apple’s position at the top of the tech industry is under genuine threat. And last week’s deal… put Apple’s plight into sharper focus”.
Gurman, arguably the sharpest Apple commentator who reliably reports on its inner workings, warns that Apple faces a dilemma. “At some point, the tech landscape will change, and clinging to yesterday’s ideas will be a problem,” writes Gurman. “AI is quickly becoming as foundational as the multitouch display was two decades ago, and it’s ushering in a new wave of devices – centred on instant access to information and intuitive voice interaction.”
Gurman points out Apple is aware of being “at a crossroads”.
Apple services boss Eddy Cue told the US government’s antitrust case against Google earlier this year that: “New technologies come about, new companies get formed, and the incumbents have a hard time with it.”
Cue’s testimony was a stark reminder of what a cutthroat place Silicon Valley can be, reminiscing about how many of the big-name tech firms no longer exist.
“You have to earn it in technology every day,” Cue testified. “People still are going to need toothpaste 20 years from now, 40 years from now. You may not need an iPhone 10 years from now, as crazy as that sounds. You have to earn it.”
Google, meanwhile, has supercharged all of its offerings with AI smarts.
“The kind of use cases we are serving in search is dramatically expanding,” Google CEO Sundar Pichai told the company’s annual I/O developer conference.
But it won’t come cheap. Like OpenAI and Anthropic, it will charge its power users $250 a month for its “AI Ultra Plan”. The other two AI firms charge $200.
Normal users can switch Google Search into “AI Mode,” which will summarise search results.
Google, however, wants you to know it has worked on reducing the cost of its AI search. As Pichai said, “over and over, we’ve been able to deliver the best models at the most effective price point”.
But last week’s highlights have been stolen by OpenAI and Apple’s greatest designer, Jony Ive, who may well be the man to invent the next big thing after the smartphone. Everybody is excitedly watching.
This article first appeared on Business Live
