It was meant to be Google’s big week, with its long-awaited AI announcements at its annual developer’s conference. But all the glory was hogged by OpenAI’s $6.4bn acquisition of oi, the start-up 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 in AI to 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 Apple 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 we’re all accustomed to on a laptop or smartphone. We’ve moved from desktop to laptop, external mouse to trackpad — before the mobile revolution upgraded that interface to touchscreens and our fingers.
However, in the age of generative AI the way we are going to interface with our technology is likely to be our voices. Current GenAI models offer simplistic services that require a text prompt, but the 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 they are clearly watching 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 “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 said “it will be worth the wait — it’s a crazy, ambitious thing to make”.
Some recent attempts at an AI device — such as the Humane Pin — have spectacularly flopped. Meanwhile, Apple has seen a number of its high-profile design team leave — many of them joining Ive at his own design firm, LoveFrom, and at the 55-person start-up io.
For the first time there are stories that Apple might be dethroned, while late last week US President Donald Trump threatened the company with 25% import tariffs unless it starts 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 US will be manufactured and built in the US, not India or anyplace else,” Trump posted on his social media 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 market valuation. “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 to reliably report 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,” he wrote. “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 that 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 cut-throat place Silicon Valley can be, reminiscing how many of the big-name tech firms no longer exist. “You have to earn it in technology every day,” he 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.”
Meanwhile, Google 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 its 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. But Google wants you to know it has worked on bringing the cost of its AI search down. As Pichai said, “over and over, we’ve been able to deliver the best models at the most effective price point”.
This week’s limelight has been stolen by OpenAI and Apple’s greatest designer, Ive, who may well be the man to invent the next big thing after the smartphone. Everybody is watching excitedly.
• Shapshak is editor-in-chief of Stuff.co.za.
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