Former Apple CEO John Sculley said tech companies making great strides in AI have upset the apple cart for the Cupertino, Calif.–based giant.
Speaking to Fortune’s Diane Brady at the Zeta Live conference in New York on Thursday, he warned Apple was facing its “first real competitor” in “many decades” in OpenAI.
“AI has not been a particular strength for them,” Sculley said of Apple.
Wall Street has mounted pressure on Apple as it struggles to make the same inroads in AI as its Magnificent Seven and private company counterparts. Over the past decade, Apple appeared to make savvy moves in building momentum in AI, launching Siri in 2011 and poaching John Giannandrea from Google in 2018 to be its head of AI.
But the company was caught flat-footed after OpenAI’s release of ChatGPT in 2022, and when it finally announced its “Apple Intelligence” AI strategy in June 2024, results fell short. Apple said in June it was delaying its AI upgrades to Siri until 2026, and Giannandrea was sidelined from the project. The company was even considering using Anthropic’s or OpenAI’s AI technology to power Siri over its own in-house models, Bloomberg reported in June.
Even its most recent blowout earnings failed to assuage investors of concerns around not only AI adoption, but also the impact of higher tariffs costing the company $800 million in the previous quarter.
For his part, Cook told investors on Apple’s most recent earnings call that the company is taking steps to both restructure staff internally and acquire other companies to catch up in the AI race.
“We have a great team, and we’re putting all of our energy behind it,” he said.
Meanwhile, Apple stock is down about 1% so far this year, while AI chip leader Nvidia is up nearly 40%, and AI hyperscaler Microsoft, which is also a top OpenAI investor, is up 22%.
Despite Apple’s market cap increasing from $300 billion to $3.2 trillion under Cook’s watch, some have called for the CEO to step aside amid lackluster AI results.
Sculley, who served as CEO of Apple from 1983 to 1993, acknowledged the possibility of Cook’s tenure coming to an end, saying on Thursday that whoever succeeds him should help transition the company from an orientation around apps to agentic AI.
It is this push toward agentic AI that has Sculley believing OpenAI presents a real threat to Apple’s competitive prowess. Apps are no longer as effective as a subscription model, he said, which is how OpenAI operates ChatGPT.
“When we had apps at the center of everything, it was selling tools, selling products,” Sculley said. “When you think of subscription, it’s about people paying for something as long as they need it.”
