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Apple’s diversity policy and partnership with Openai are fired from conservative organizations at the annual shareholders meeting. This is because iPhone makers are opposed to corporate activities following Donald Trump’s election as US president.
Investors at the 3.7tn company will vote on a complaint from the National Center for Public Policy Studies on Tuesday that Apple is trying to remove its diversity, equity and inclusion (DEI) policies. The conservative nonprofit claims that a recent U.S. Supreme Court ruling on DEI’s policies will leave the company exposed to potential lawsuits.
Another shareholder resolution calls for a report on how Apple can guarantee a “ethical” artificial intelligence strategy. The proposal warns that partnership between Apple and OpenAI could create data privacy and security risks.
The vote on the two shareholder proposals is based on bipartisan scrutiny of AI space transactions, and companies that drop progressive policies when Google and Google overtures the new US administration. It will be brought as a companion.
Apple is against both moves. They are unlikely to pass, primarily because their biggest shareholders, BlackRock and Vanguard, are distanced from political shareholder activities.
Such movements can have a knock-on effect. In January, Costco shareholders overwhelmingly rejected a similar DEI proposal from NCPPR. The 19 Republican state attorney generals then wrote letters to the company urging them to end the policy.
Apple’s CEO Tim Cook has been courting Trump for many years and has been a prominent feature at his inauguration. The company is exposed to political tensions between Washington and Beijing, and the large tech companies also want the president to force the EU to enforce regulations.
Tuesday’s NCPPR complaint covers Apple’s “Supplier Diversity Program,” its general promotion and employment practices, hiring a vice-president of inclusion and diversity, and donations to organizations supporting DEI.
The iPhone manufacturer’s board of directors “inappropriately attempts to limit Apple’s ability to manage its own normal business operations, people and teams, and business strategies.”
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Meta, Google, Amazon, Walmart, McDonald’s and Target are among the US companies that have rewind DEI’s policies in the face of hostility and brave conservative movements from the Trump administration.
Shareholder proposals are non-binding, but they can be forced to comply with political issues. In 2022, Apple’s proposal urged the company to publish new diversity disclosures, calling for a racial equity audit, passed with a majority shareholder support.
Meanwhile, shareholder motions targeting Apple’s relationship with Openai reflect the criticism leveled by Trump’s cost-cutting Tsar Elon Musk.
If data collected by Openai infringes on personal privacy or copyrighted material, it could be a risk to Apple shareholders, the National Law and Policy Center said in its petition.
“The proposal does not focus on the issue of Apple Intelligence,” said Apple’s board of directors that in response to a complaint last month, referring to new AI capabilities for mobile devices. “Instead, we’re focusing our criticism on Openai, the developer of ChatGPT, an independent service that Apple users can choose to access.”
In December, Microsoft faced three AI-related shareholder proposals at its annual meeting. None passed, but those submitted by NLPC, similar to Apple’s proposal, received 36% support from Microsoft shareholders.
The Seattle-based tech giant was sued in January when it allegedly disclosed customer information from LinkedIn, one of its subsidiaries, to train its AI programs. The NLPC said the lawsuit showed that “we were proven right.”
NLPC’s Apple proposal is likely to face skepticism from investors, said Jamie Bonham, head of stewardship at Asset Manager Nei Investments.
Apple didn’t have a history of privacy issues like its rivals, he said. “I don’t know that Apple is a particularly appropriate target,” Bonham said of the AI proposal, but added that he had not decided how to vote at AGM.
Additional Reports by Christina Criddle of San Francisco
