OpenAI’s (PC:OPAIQ) chief executive officer Sam Altman now sees Apple (AAPL) as the company’s most important long-term competitor. While many in the tech space still view Alphabet (GOOGL) as OpenAI’s main rival in the AI race, Altman believes the real battleground is shifting from software to hardware.
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Speaking at a lunch with reporters in New York, Altman said that future breakthroughs in AI will depend more on devices than apps. He noted that current smartphones are not designed for AI assistants, and suggested that better hardware will be key to the next phase of AI growth. These remarks reflect a change in OpenAI’s broader strategy, with more focus now on consumer-facing tools.
A New Hardware Race
To support this shift, OpenAI has paused all side projects for eight weeks. Teams are now focused entirely on improving ChatGPT, the company’s flagship product. Altman has also fast-tracked the rollout of its next model, GPT-5.2.
This urgency, however, comes amid growing pressure from Alphabet, not Apple. Its Gemini 3 model recently ranked above ChatGPT in the LM Arena benchmark, which tracks large model performance. In response, OpenAI claims its next release will outperform Gemini in internal evaluations.
Despite that pressure, OpenAI is placing its longer-term bets on hardware. In May, the company acquired io, an AI device startup, for $6.5 billion. The startup was co-founded by former Apple designer Jony Ive, along with other former senior Apple leaders. Since the deal, OpenAI has hired more than 40 hardware engineers from Apple. New hires include specialists in cameras, wearables, robotics, and audio systems.
The team is now developing new AI-powered devices, aiming to launch products by the end of 2026. Ive has described the early concepts as elegant and easy to use. For OpenAI, these devices could offer a new way to deliver AI experiences beyond the browser or app.
Apple Responds to Pressure
At the same time, Apple is losing key talent from its AI division. Ruoming Pang, who led Apple’s 100-person foundation model team, joined Meta Platforms Inc. (META) in July. Reports say his pay package exceeded $200 million. Ke Yang, a senior director focused on AI search, also left for Meta in October.
Adding to that, Johny Srouji, Apple’s senior vice president of hardware technologies, is now rumored to be considering an exit. His departure would mark another major change within Apple’s leadership team.
In response, Apple has started testing Alphabet’s Gemini models to improve Siri, its voice assistant. The company is also in talks over a possible $1 billion per year licensing deal to use the Gemini model, which includes 1.2 trillion parameters. Siri’s next upgrade is now delayed until 2026, as Apple reevaluates its AI roadmap.
These developments support Altman’s view that Apple poses the bigger long-term challenge. While Alphabet continues to compete on AI model performance, Apple is building the hardware layer that could reshape how people use AI in their everyday lives.
We used TipRanks’ Comparison Tool to align notable traded companies that employ chatbots similar to ChatGPT and Gemini. It’s an excellent tool to gain a broader perspective on each stock and the AI industry as a whole.
