Monday, June 24, 2024

Apple Shares Fall In Premarket As Wall Street Stays Lukewarm On Firm’s AI Vision And Musk Blasts OpenAI iPhone Plans

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Apple shares fell during premarket trading on Tuesday after the company debuted “Apple Intelligence” to great fanfare at its annual WWDC event, a hotly anticipated insight into the tech giant’s vision for artificial intelligence that confirms a long rumored partnership with ChatGPT maker OpenAI and incurred the wrath of Tesla billionaire Elon Musk.

Key Facts

Apple shares were down 0.83% to $191.51 during premarket trading Tuesday morning.

The slide continues a downward trend from the day before, when Apple shares fell nearly 2% to $193.12 during regular trading.

Wall Street’s lukewarm response comes after CEO Tim Cook unveiled the company’s long awaited strategy to integrate generative AI across its products at its annual developers conference, Apple Worldwide Developers Conference 2024 (WWDC 2024).

The company, a Silicon Valley titan by any measure that often leads technology trends, had been widely perceived as lagging behind rivals like Google and Microsoft in the race to develop and deploy generative AI tools like ChatGPT and its shares have remained relatively flat this year compared to the soaring value of some of its rivals benefiting from the AI boom.

The fall reversed some of the gains made by Apple in the lead up to the event, where it was widely expected to finally announce its approach to AI, with shares having climbed roughly 14% since the start of May in anticipation.

As well as announcing plans to roll out artificial intelligence across its flagship devices, broadly termed “Apple Intelligence,” which will integrate OpenAI’s popular chatbot ChatGPT into products, Apple also announced software updates for the iPhone allowing greater customization and upgrades to its Vision Pro mixed-reality headset.

What To Watch For

Apple’s decision to partner with ChatGPT maker OpenAI to boost products like the voice assistant Siri have been a long-expected development in Silicon Valley. There had been media reports and analyst speculation surrounding an impending deal to put ChatGPT on iPhones between Apple and OpenAI circulating for weeks before the event. It is a development that has clearly earned the wrath of Tesla billionaire Elon Musk, who slammed the partnership as an “unacceptable security violation” and vowed to bar Apple devices from his companies if Apple integrates OpenAI at the operating system level. In a series of fiery posts on social media, Musk claimed Apple had little idea of what it was doing, security wise, and expressed concerns about the privacy of users’ information if ChatGPT is integrated. “They’re selling you down the river,” he said.

Chief Critic

Musk’s threat to bar Apple devices from his companies’ campuses extends to visitors too. Those visiting Musk’s firms — which includes social media platform X, Tesla, xAI, Neuralink, Boring Co. and SpaceX — will have to check their Apple products at the door if Apple goes ahead with its plans, the billionaire warned. “Visitors will have to check their Apple devices at the door, where they will be stored in a Faraday cage.”

Tangent

Musk recently raised $6 billion in a funding round for his AI startup, xAI, that has reportedly brought its valuation to $24 billion. Musk, who was an original cofounder of OpenAI but spectacularly fallen out with the company and management over its approach to profits and AI risk since, started the company with the intention of competing with OpenAI.

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What We Don’t Know

Apple did not reveal when it would make new features announced at WWDC 2024 available to consumers.

Further Reading

ForbesMusk Reignites Feud With Sam Altman Over OpenAI’s Ditched Non-Profit PromiseForbesElon Musk Sues OpenAI And CEO Sam Altman Over Abandoned Non-Profit PromiseForbes‘Unacceptable Security Violation’: Elon Musk Says If Apple Integrates OpenAI In Its OS His Companies Will Ban Apple DevicesForbesAll The Major Features Unveiled At Apple’s Keynote-From AI iPhones To Siri Enhancements

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