Apple Isn't Paying OpenAI for Access to ChatGPT, Report Reveals Surprising Agreement

Apple will incorporate OpenAI's ChatGPT into its devices without financial compensation, aiming for mutual benefits and broader user access, according to a Bloomberg report.

Apple to Integrate OpenAI's ChatGPT Without Direct Compensation: Sources Highlight Strategic Value Over Financial Gains

In a recent report by Business Insider, Apple declared on June 10 that it would incorporate OpenAI's ChatGPT into its devices. However, Bloomberg was informed by individuals privy to the agreement that the iPhone manufacturer was not compensating OpenAI for using its product.

They stated that Apple believed the new agreement would be of equal or more excellent value than a financial payment, bringing OpenAI's technology closer to hundreds of millions of users.

However, the sources also stated that the alliance between Apple and OpenAI was not anticipated to generate significant revenue for either company.

Both parties may still benefit from the agreement. Apple, for instance, would reap the rewards of providing consumers with access to a sophisticated AI chatbot.

Additionally, OpenAI is poised to capitalize on Apple's extensive platform. By being incorporated into devices, it is expected to reach millions of Apple users, some of whom may upgrade to paid ChatGPT versions, which are available for $20 per month.

Apple and OpenAI should have promptly responded to inquiries from Business Insider that were submitted outside their regular business hours.

OpenAI Gains Strategic Access to Apple's Ecosystem: Integration to Span iPhones, iPads, and Macs Amid Broader AI Partnerships

OpenAI may receive a favorable deal, as partnering with Apple is not shared. In 2022, Google paid the company $20 billion to have its search engine serve as the default on iPhones and other Apple devices.

OpenAI's access to Apple users is also quite extensive. Apple disclosed its intention to integrate ChatGPT into its iPhone, iPad, and Mac products during its Worldwide Developers Conference on June 10. Users can access writing tools, document reading, and image generation without transitioning between applications.

Additionally, the technology behemoth intends to integrate ChatGPT with Siri, the preinstalled digital assistant on Apple devices. Users can decline the integration and determine whether they wish for Siri to transmit their inquiries to ChatGPT.

Apple's WWDC keynote, which also addressed its in-house Apple Intelligence offerings, alleviated investors' concerns that the company was lagging in the AI sweepstakes.

Analysts who responded to the OpenAI agreement also anticipated that the partnership could reduce Apple's revenue in the short term.

For instance, Bernstein analysts wrote following the WWDC keynote that revenue sharing could be advantageous for both companies; however, Apple's returns on investment may still be impacted by "some potential migration from traditional search queries."

However, Apple may also establish comparable partnerships with other chatbots.

Craig Federighi, a senior Apple executive, also disclosed during the WWDC keynote that Apple was negotiating a partnership with Google to utilize its Gemini AI model.

In March, Bloomberg reported that Apple had also discussed a prospective chatbot partnership with Anthropic.

Photo: Microsoft Bing