$52 billion after the latest funding round. That was just at the end of May. The report says the talks with the new investors are still in the preliminary stages. Meanwhile, more on the Apple world this morning. KeyBanc downgrading Apple to sell, citing what it calls slowing iPhone builds with price increases, and expectations for next year around Macs, iPads and wearables. Nevertheless, Apple stock at a high, up about 15% year to date, pushing its market value close to $5 trillion. The other big headline: tech giant just sued OpenAI for alleged trade secret theft. Joining us right now is Walter Piecyk. He is co-founder and partner at LightShed. Good morning to you. When you think about Apple these days, 313 bucks, they will have higher prices for the next round of iPhones. That's true. The demand though, for, you know, Mac minis and everybody who wants to basically have their own server in their house has gone up at least wildly thus far. I don't know if you think that's about to change, Walter.
I mean, I'm one of them. I've got my Mac mini. Thankfully, I got it before the gigantic price increase that, you know, Cook said was unavoidable. Obviously, the company generates a tremendous amount of free cash flow margin, so it might have been avoidable, unavoidable if you wanted to maintain those margins. But look, every year is a new year. There's some new issue that Apple, you know, is dealing with. And, you know, Tim Cook has done a phenomenal job at managing that. You know, some years he brings China in. In the last couple of quarters, you may have had some pull forward. Remember, it wasn't long ago we had this tariff scare and there was potentially pull forward. That helped the revenue in some recent quarters. And obviously, China has been huge for them in the last two quarters. This is Cook's last quarter, right? This is his last earnings call that he'll be on. So now we're in this kind of transition phase which doesn't seem to be getting a lot of attention. You know, we're going to be getting turned over to a new CEO. Yes, Cook will be an executive chairman. He'll still be involved. But really, the day-to-day operations are going to be getting turned over to Ternus. So we're in a transition period here for Cook in a quarter. Now, that is typically, I think, a little bit seasonally weak. If you talk to some of the operators, this is not a huge quarter. It's an advance of, you know, the expectation of new products, including a foldable iPhone, which is, you know, discussed at maybe a 2,000-plus price tag. So we'll have to see. Every year again is a new challenge. We're coming off a big potentially pull forward couple of quarters. I think it's an interesting downgrade in the context of like, you know, have maybe estimates gotten a little bit ahead of themselves for the next year or so?
Walter. Here's the question. And maybe it's the Mac mini question, or maybe it's the cloud question. In the world of AI, there's one argument to say that everything is going to happen in the cloud, should be more efficient in the cloud, it should be cheaper in the cloud on one side. The other side says it's all going to move to the edge. It's all going to get processed on your phone. It'll be cheaper to process on your phone. It'll be cheaper to process on your, your, your Mac mini inside your house. And that we're all going to want our own private servers wherever we are. Which is it?
I mean, it's a good question. We'll have to see how it plays out. There's a debate, and you also inject the open models aspect of this as well. Right. Running an open model on your, on your local, whether it's PC, phone, watch, or then ultimately device. Up to this point, the open models, when they get good, convert to closed models and they're looking for payment. Even if you look at the etymology of OpenAI, it was theoretically supposed to be open. Facebook, you look at some of the models in China starting open and then maybe closing to get money. And then the question is, are those local models that you're referring to going to be good enough? The local models that I try to use on my Mac mini are not, you know, even close to being as good as cloud or as fast as cloud. Now, there's some management of cost that balances that where maybe you say like, okay, it's not good and it's not as good as cloud, but I don't need, you know, the high value of cloud all the time. And I can do a lot of these tasks. Now let's go take it to Apple. And what you're referencing, being able to use the information on my phone and having a local model on my phone to do things with my personal information. That's where Apple's pitch is going. Run it on my phone. Use the access to iMessages that you, the user, will not want to, you know, send into the cloud for analysis. And that's the type of, you know, early benefits of AI that Apple thinks can drive more, more loyalty rather than less loyalty. If they're wrong and that local model isn't enough, and people still want to go out to Gemini, still want to go out to cloud, that just puts them at risk. And then I'll take it one step further, Andrew. You know, if you talk to Qualcomm, the guy who's helping a lot of the competitors to Apple design the 40 or so new designs where they want you to get to stop staring at your phone and interact with whatever Jony Ive is, is developing for OpenAI. That local model on the edge may in fact reduce your usage of the phone, right? Because that analysis is occurring on devices that are off your phone.
Well, let's go there for a second because on the screen right there, we say Apple filed suit against OpenAI. Of course, it caused a lot of consternation, drama online and elsewhere, even with Elon Musk over the weekend and Sam Altman back and forth. What is your expectation that that lawsuit will result in? Meaning, do you look at that and say, oh goodness, OpenAI, whatever they're building, whatever Jony Ive is building, this has now been delayed a year. So Apple has bought itself a year or something like that. Or do you say, you know what, this whole market is so open and wide and people are going to come up with all sorts of devices in the next year anyway?
