AAPL Drops Amid Speculation of AI Device Revolution by OpenAI and Jony Ive

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May 24, 2025
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The iPhone dramatically transformed the world, but now, a new collaboration between OpenAI and Apple's former design chief, Jony Ive, aims to create the next groundbreaking device. On Wednesday, OpenAI CEO Sam Altman announced the acquisition of a startup founded by Ive and other former Apple employees, with the goal of developing a new device for the AI era. Following this announcement, discussions about the "end of smartphones" escalated, resulting in Apple's (AAPL, Financial) stock dropping 2.3%.

Despite the excitement, Barron’s tech writer Adam Levine advises caution, noting the history of failed high-profile collaborations. The AI device's form and function remain mysterious, although Altman claims to have received a prototype from Ive, which he describes as potentially the world’s coolest tech product. However, the failure of previous AI devices, like the Humane AI Pin, highlights the challenges. These devices often rely on cloud computing, limiting their offline functionality and causing latency issues.

Ultimately, the success of this new venture remains uncertain, as it may require a completely new interface if it forgoes traditional screens.

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I/We may personally own shares in some of the companies mentioned above. However, those positions are not material to either the company or to my/our portfolios.