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Gene Munster, Managing Partner at Deepwater Asset Management, warned Wednesday that OpenAI represents the first serious competitive threat to Apple Inc. (NASDAQ:AAPL) in two decades following the artificial intelligence company’s $6.5 billion acquisition of former Apple design chief Jony Ive‘s hardware startup.
What Happened: “The real risk for AAPL is whether the threat of these devices from OpenAI compresses Apple’s multiple,” Munster wrote on X, highlighting concerns about the iPhone maker’s premium valuation amid intensifying AI competition.
OpenAI announced plans to acquire io Products, Ive’s AI device startup, in an all-stock transaction that values the company at $6.5 billion despite having no revenue. The deal adds Ive and approximately 55 hardware engineers to OpenAI’s team as the ChatGPT maker pivots into consumer devices expected to launch in 2026.
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Munster characterized the move as part of a generational technology shift comparable to the internet and smartphone revolutions. “Before AI, there was no real threat to Apple’s or Google‘s business,” he noted, emphasizing that OpenAI is “catalyzing this shift into something tangible.”
Why It Matters: The acquisition triggered over 2% decline in Apple shares on Wednesday as investors weighed the competitive implications. Ive, who designed iconic Apple products including the iPhone, left the company in 2019 after nearly three decades.
However, Munster tempered concerns about Apple’s competitive position, citing the company’s ecosystem lock-in with an estimated 1.7 billion users across 2.35 billion active devices. “It’s going to take more than a great phone from OpenAI to get Apple users to walk away from a decade of investment in hardware and services,” he said.
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The analyst suggested Alphabet Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG) faces greater risk, noting that Google’s ecosystem integration is “not nearly as strong” as Apple’s hardware-software integration.