6 ms·

From the article 5 billion of the payment is equity in OpenAI. So they aren't spending cash

alexey-salmin 1y ago
This still means 1.5B were paid in cash for a company from what I understood has neither clients nor even a product. Not exactly pocket money.
- brentm 1y ago
  Appears from the outside as a very expensive aquihire but if you're getting the guy who essentially created the iPhone it could be worth it.
  - dbbk 1y ago
    But they're not getting him. Jony isn't included in the deal.
    - jermaustin1 1y ago
      He has $5B reasons to help them though.
    - brentm 1y ago
      They are according to WSJ: > Jony Ive, a chief architect of the iPhone, and his design firm are taking over creative and design control at OpenAI, where they will develop consumer devices and other projects that will shape the future look and feel of AI. https://www.wsj.com/tech/ai/former-apple-design-guru-jony-ive-to-take-expansive-role-at-openai-5787f7da?mod=hp_lead_pos4 https://www.wsj.com/tech/ai/former-apple-design-guru-jony-iv...
      - dbbk 1y ago
        The Verge says otherwise > Ive won’t be joining OpenAI, and his design firm, LoveFrom, will continue to be independent, but they will “take over design for all of OpenAI, including its software,” in a deal valued at nearly $6.5 billion https://www.theverge.com/news/671838/openai-jony-ive-ai-hardware-apple https://www.theverge.com/news/671838/openai-jony-ive-ai-hard...
        bredren 1y ago
        “Including its software…” That’s a remarkably big product scope to own! Are we talking about Devex workflows from docs on getting fed through Ive’s group? The Verge must have this wrong, it doesn’t make sense and I don’t think Ive would be interested in maintaining design on ChatGPT’s web client. Besides, only Anthropic beats the UX of ChatGPT. It would seem like a mistake to dismiss the authority of the folks who have built that product up.
  - paxys 1y ago
    Ive is a good designer sure but "essentially created the iPhone" is absurd. It took thousands of engineers and product visionaries to bring that device together, and OpenAI isn't getting any of that. You aren't going to replicate its success by hiring the guy whose major contribution was insisisting that all Apple products be a few millimeters thinner in every iteration.
    - woah 1y ago
      Lots of companies were making smart phones with similar specs. Under Johnny Ive's management, the Apple version made a much bigger splash than any of them and defined the category.
      - timschmidt 1y ago
        Arguably HP/Palm's WebOS devices were ahead on every mark - easier to use, more featureful, smarter, better physical design than any iPhone of similar manufacturing date. The difference was management choosing to stick with a platform for long enough for network effects to kick in. If Apple has any advantages compared to other big tech, it's an ability to look past next quarter's financials.
        waffletower 1y ago
        Palm offerings in 2007, such as the Treo 755p or the Centro, could not compete hardware-wise with the original iPhone. The claim that these Palm phones were "easier to use" is hilarious to me, and probably hilarious to many others.
        timschmidt 1y ago
        I explicitly mentioned WebOS, meaning the devices released around 2009, which competed with 1st gen iPhone old stock, and directly against iPhone 3G - the second generation. The first gen iPhone is not a smartphone by today's standards. No multitasking, no copy/paste, no centralized instant messaging, all things WebOS devices had on release. Even the second generation of iPhones felt half baked by comparison. Which just goes to illustrate my point, that they weren't technologically superior, just more committed.
  - always_imposter 1y ago
    [dead]
- jermaustin1 1y ago
  It kind of is, when they were given $500B and told to make a return in 10-ish years. They have to put the capital in play where it has the largest ROI potential. They are gambling that Jony has another iPhone in him. I don't know enough about any of this to weigh in on it, but when you take investor money, you aren't supposed to sit on it or do slow burn (at least not VC money), its meant to be gasoline, and you moonshot with it.
  - pier25 1y ago
    > They are gambling that Jony has another iPhone in him. I seriously doubt it. If anything because Apple let him go exactly when they were looking for a new hit product like the iPhone. But also because how he handled the Mac the years before he was fired. All his big decisions were just bad. The butterfly keyboard, touchbar, USB-C only ports, etc. Heck even the 2013 Mac Pro (the trashcan) was an engineering failure. They could never upgrade it because, according to Craig Federighi, they got themselves into a thermal corner caused by the design of it[1]. [1] https://daringfireball.net/2017/04/the_mac_pro_lives https://daringfireball.net/2017/04/the_mac_pro_lives
    - jermaustin1 1y ago
      The greatest home run hitters of all time average < 30% hit rate (not 30% of hits are home runs, but 30% of swings are even hits). Sometimes you gotta swing for that fence regardless of the outcome.
      - pier25 1y ago
        But even those best home run hitters reach a point where the hit rate drops way below average...
      - dowager_dan99 1y ago
        since we're torturing the analogy... you don't measure a baseball team's success by the # of HR's one player records in a season, you talk championships over time. Sometimes they're related, but less frequently than you'd think.
- gnopgnip 1y ago
  They previously invested and already owned 23% of the company. So no cash for this Aquisition
- rahul342 1y ago
  > OpenAI already owns a 23% stake in io as part of a deal from last year, meaning it needs about $5 billion for the acquisition, the Times reported, citing unnamed people familiar with the matter. https://www.marketwatch.com/story/heres-why-openai-is-buying-iphone-designer-jony-ives-startup-for-6-5-billion-efa07fb6 https://www.marketwatch.com/story/heres-why-openai-is-buying...
- bigmadshoe 1y ago
  They already have a product, 500m+ active users, and billions in revenue. They aren't remotely profitable, but that is a different conversation.
  - newlisp 1y ago
    You misunderstood.
    - bigmadshoe 1y ago
      My bad. I inserted "by" instead of "for". I see your point!
- ojbyrne 1y ago
  From the article: “all-stock deal” “As part of the deal, OpenAI is paying $5 billion in equity for io. The balance of the nearly $6.5 billion stems from a partnership reached in the fourth quarter of last year that involved OpenAI acquiring a 23% stake in io.”
mushufasa 1y ago
Honestly I think it's a great move if you know you have a hyped up valuation, to exchange that paper valuation for actual company acquisitions. Not every company has that ability.

This still means 1.5B were paid in cash for a company from what I understood has neither clients nor even a product. Not exactly pocket money.

brentm 1y ago
Appears from the outside as a very expensive aquihire but if you're getting the guy who essentially created the iPhone it could be worth it.
- dbbk 1y ago
  But they're not getting him. Jony isn't included in the deal.
  - jermaustin1 1y ago
    He has $5B reasons to help them though.
  - brentm 1y ago
    They are according to WSJ: > Jony Ive, a chief architect of the iPhone, and his design firm are taking over creative and design control at OpenAI, where they will develop consumer devices and other projects that will shape the future look and feel of AI. https://www.wsj.com/tech/ai/former-apple-design-guru-jony-ive-to-take-expansive-role-at-openai-5787f7da?mod=hp_lead_pos4 https://www.wsj.com/tech/ai/former-apple-design-guru-jony-iv...
    - dbbk 1y ago
      The Verge says otherwise > Ive won’t be joining OpenAI, and his design firm, LoveFrom, will continue to be independent, but they will “take over design for all of OpenAI, including its software,” in a deal valued at nearly $6.5 billion https://www.theverge.com/news/671838/openai-jony-ive-ai-hardware-apple https://www.theverge.com/news/671838/openai-jony-ive-ai-hard...
      - bredren 1y ago
        “Including its software…” That’s a remarkably big product scope to own! Are we talking about Devex workflows from docs on getting fed through Ive’s group? The Verge must have this wrong, it doesn’t make sense and I don’t think Ive would be interested in maintaining design on ChatGPT’s web client. Besides, only Anthropic beats the UX of ChatGPT. It would seem like a mistake to dismiss the authority of the folks who have built that product up.
- paxys 1y ago
  Ive is a good designer sure but "essentially created the iPhone" is absurd. It took thousands of engineers and product visionaries to bring that device together, and OpenAI isn't getting any of that. You aren't going to replicate its success by hiring the guy whose major contribution was insisisting that all Apple products be a few millimeters thinner in every iteration.
  - woah 1y ago
    Lots of companies were making smart phones with similar specs. Under Johnny Ive's management, the Apple version made a much bigger splash than any of them and defined the category.
    - timschmidt 1y ago
      Arguably HP/Palm's WebOS devices were ahead on every mark - easier to use, more featureful, smarter, better physical design than any iPhone of similar manufacturing date. The difference was management choosing to stick with a platform for long enough for network effects to kick in. If Apple has any advantages compared to other big tech, it's an ability to look past next quarter's financials.
      - waffletower 1y ago
        Palm offerings in 2007, such as the Treo 755p or the Centro, could not compete hardware-wise with the original iPhone. The claim that these Palm phones were "easier to use" is hilarious to me, and probably hilarious to many others.
        timschmidt 1y ago
        I explicitly mentioned WebOS, meaning the devices released around 2009, which competed with 1st gen iPhone old stock, and directly against iPhone 3G - the second generation. The first gen iPhone is not a smartphone by today's standards. No multitasking, no copy/paste, no centralized instant messaging, all things WebOS devices had on release. Even the second generation of iPhones felt half baked by comparison. Which just goes to illustrate my point, that they weren't technologically superior, just more committed.
- always_imposter 1y ago
  [dead]
jermaustin1 1y ago
It kind of is, when they were given $500B and told to make a return in 10-ish years. They have to put the capital in play where it has the largest ROI potential. They are gambling that Jony has another iPhone in him. I don't know enough about any of this to weigh in on it, but when you take investor money, you aren't supposed to sit on it or do slow burn (at least not VC money), its meant to be gasoline, and you moonshot with it.
- pier25 1y ago
  > They are gambling that Jony has another iPhone in him. I seriously doubt it. If anything because Apple let him go exactly when they were looking for a new hit product like the iPhone. But also because how he handled the Mac the years before he was fired. All his big decisions were just bad. The butterfly keyboard, touchbar, USB-C only ports, etc. Heck even the 2013 Mac Pro (the trashcan) was an engineering failure. They could never upgrade it because, according to Craig Federighi, they got themselves into a thermal corner caused by the design of it[1]. [1] https://daringfireball.net/2017/04/the_mac_pro_lives https://daringfireball.net/2017/04/the_mac_pro_lives
  - jermaustin1 1y ago
    The greatest home run hitters of all time average < 30% hit rate (not 30% of hits are home runs, but 30% of swings are even hits). Sometimes you gotta swing for that fence regardless of the outcome.
    - pier25 1y ago
      But even those best home run hitters reach a point where the hit rate drops way below average...
    - dowager_dan99 1y ago
      since we're torturing the analogy... you don't measure a baseball team's success by the # of HR's one player records in a season, you talk championships over time. Sometimes they're related, but less frequently than you'd think.
gnopgnip 1y ago
They previously invested and already owned 23% of the company. So no cash for this Aquisition
rahul342 1y ago
> OpenAI already owns a 23% stake in io as part of a deal from last year, meaning it needs about $5 billion for the acquisition, the Times reported, citing unnamed people familiar with the matter. https://www.marketwatch.com/story/heres-why-openai-is-buying-iphone-designer-jony-ives-startup-for-6-5-billion-efa07fb6 https://www.marketwatch.com/story/heres-why-openai-is-buying...
bigmadshoe 1y ago
They already have a product, 500m+ active users, and billions in revenue. They aren't remotely profitable, but that is a different conversation.
- newlisp 1y ago
  You misunderstood.
  - bigmadshoe 1y ago
    My bad. I inserted "by" instead of "for". I see your point!
ojbyrne 1y ago
From the article: “all-stock deal” “As part of the deal, OpenAI is paying $5 billion in equity for io. The balance of the nearly $6.5 billion stems from a partnership reached in the fourth quarter of last year that involved OpenAI acquiring a 23% stake in io.”

mushufasa 1y ago

Honestly I think it's a great move if you know you have a hyped up valuation, to exchange that paper valuation for actual company acquisitions. Not every company has that ability.