There have been a lot of rumors over the years that Atari contributed to the founding of Apple Computer. In the spring of 2000, ACAM’s Mike Stulir had the pleasure of conducting an extensive interview with Atari’s founder, Nolan Bushnell. Mike brought the subject up and here is what Nolan had to say:
MS: Nolan, can you tell me a bit about the link between the early Atari days and the founding of Apple Computer? I know you had a hand in that and I was wondering if you could clear the air about how that came about.
NB: Sure. Steve Jobs worked for me at Atari and Steve Wozniak kind-of came in and was not officially employed by the company, but we gave some projects to Jobs and I know he split some of the money with Wozniak for helping. We had a policy allowing engineers to use parts from our labs because gates and things like that, if you bought them from a place like Radio Shack, they would cost $1.50 and Atari would get them in bulk for $0.11. And so, for personal projects, we had a very loose policy about allowing people to use our parts. In some ways, the early Apple computer used Atari’s parts (Nolan laughs) with full knowledge and full awareness on our part….and we did not mind. In fact, Steve Jobs came to me to be the first investor in Apple Computer, which I declined. I felt it was a conflict of interest. But I did introduce him to Don Valentine, who was one of Atari’s venture capitalists. He was the guy who introduced Mike Markkula to the company & he handled a lot of the early formation issues of Apple Computer and supplied a significant amount of the capital. That was the link.
MS: Can you elaborate on why you felt investment in Apple Computer was a conflict of interest? If Wozniak and Jobs were developing their technology using some Atari parts, why did Atari not approach them about building that line of computers under the Atari name?
NB: Steve Jobs had left the company for a year before working heavily on the Apple computer. Steve left Atari to go to India to study for some period of time and ended up contracting a blood disease. It wasn’t until he came back to the United States, and recovered, that he started in earnest on that. At that time, the Atari business was consuming 100% of the capital we could throw at it in terms of the video game business. The video game business was exploding at that time. The personal computer business did not exist, but we saw the potential of doing a word processor. What we did not see was the spreadsheet. The real answer is that we felt our hands were so full that when Steve came back to me…and this was some time later…and wanted me to put the $50,000 in, we already had our project for what turned out to be the Atari 800 in the lab. We felt that we had to do a complete integration that took an extra year-and-a-half in the lab. If you look really close at the inside of an Atari 800 vs. an Apple II, the Apple II has a lot of branded parts around a 6502 processor. The Atari unit was essentially two chips and is a much more sophisticated machine. It was a year later into the marketplace because of that.