Apple’s AI progress slows as Jony Ive joins OpenAI in major partnership: Report

Jony Ive’s recent partnership with OpenAI has raised concerns at Apple, amid the company’s loss of top design talent and struggles to keep up in artificial intelligence, Bloomberg’s Mark Gurman reported.

The $6.5 Billion Partnership

Jony Ive, the designer behind many of Apple’s most iconic products, has teamed up with OpenAI CEO Sam Altman in a deal valued at nearly $6.5 billion. As part of the agreement, OpenAI is acquiring Ive’s startup, io, and Ive will lead the design of new OpenAI hardware. This move places Ive, once central to Apple’s success, alongside a major AI competitor.

Apple’s Growing Challenges

Gurman notes that although Apple continues to sell millions of iPhones and serves over 2 billion users, it has fallen behind rivals like Google and Microsoft in advancing generative AI. Since 2020, the iPhone’s design has changed little, and the company is losing engineers who maintain its core products.

While Apple’s ecosystem remains strong and competitors such as Samsung, Google, and Meta have yet to fully capitalize on AI, Gurman emphasizes that Apple’s dominant position faces increasing pressure.

What the OpenAI Deal Means

This deal places Ive in charge of designing OpenAI’s new hardware, highlighting Apple’s difficulty retaining key talent and pushing AI innovation forward. The report adds that when Ive left Apple in 2019, many expected he would remain connected with the company’s leadership, but that didn’t happen. Now, his close collaboration with OpenAI could widen the gap between Apple and emerging AI rivals.

Apple’s AI Direction and WWDC 2025 Preview

At the upcoming Worldwide Developers Conference (WWDC) on June 9, Apple plans to announce updates to its operating systems, though major AI breakthroughs are not expected. The company remains focused on refining existing products, while the OpenAI deal signals new AI-driven possibilities.

Software Redesign Across Devices: Apple will launch a unified “Solarium” design across Apple TV, smartwatches, Vision Pro, and all major platforms, aiming to modernize and align the look of iOS, macOS, iPadOS, tvOS, watchOS, and visionOS — refining the traditional OS instead of fully shifting to AI systems.

Opening Apple Intelligence to Developers: Apple plans to let developers use its own large language models to create AI-powered apps, potentially boosting App Store features. Other updates include battery optimization, new health tools, and improved Google Gemini integration with Siri.

Gurman believes that although Ive and Altman’s upcoming device won’t directly compete with the iPhone, its success is uncertain since the market may not yet be ready to move beyond screen-based devices.

As AI becomes as vital as the touchscreen was 20 years ago—enabling instant access and voice interaction—Apple acknowledges these changes. During a U.S. antitrust hearing, services chief Eddy Cue admitted that new technologies and competitors pose significant challenges.

Future Challenges for Apple

Gurman reports that Apple CEO Tim Cook’s recent talks with Donald Trump didn’t ease tariff tensions, as Trump is threatening a 25% tariff on iPhones made outside the U.S., targeting Apple’s shift to India. Though the rate is lower than earlier proposals, it could still push prices up.

Gurman expects Apple won’t bring iPhone production back to the U.S. due to high costs and the risk of China’s retaliation — a challenge that could benefit Chinese competitors. He warns Apple’s window to lead is narrowing, urging the company to accelerate its AI efforts, launch bold hardware, and deliver the next major iPhone before rivals move ahead.

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