Apple and OpenAI recently announced a major partnership, unveiled at the Worldwide Developers Conference (WWDC) 2024, which involves integrating OpenAI's ChatGPT into Apple's devices.
This collaboration aims to enhance Siri and introduce new AI features across iOS and macOS. However, it has been revealed that Apple will not be paying OpenAI for this integration.
This announcement has piqued the interest of tech enthusiasts and industry analysts alike, particularly due to the absence of disclosed financial terms between Apple and OpenAI.
CUPERTINO, CALIFORNIA - JUNE 10: Apple CEO Tim Cook delivers remarks at the start of the Apple Worldwide Developers Conference (WWDC) on June 10, 2024 in Cupertino, California. Apple will announce plans to incorporate artificial intelligence (AI) into Apple software and hardware. Photo by Justin Sullivan/Getty Images
Apple Is Not Paying OpenAI for ChatGPT Integration
According to Bloomberg's Mark Gurman, Apple is not paying OpenAI for this integration. Instead, the partnership is expected to generate mutual benefits through increased functionality and wider distribution rather than direct financial gains. "Apple isn't paying OpenAI as part of the partnership," noted Gurman, citing sources familiar with the deal.
According to the report, both companies see significant value in the exposure and enhanced user experience. Apple believes that integrating ChatGPT into its devices will provide substantial value, promoting OpenAI's brand and technology to hundreds of millions of users. This exposure is deemed more valuable than a traditional payment model.
While no direct payments are involved, both Apple and OpenAI may still see financial benefits. Users who experience the advanced capabilities of ChatGPT through Siri may be encouraged to upgrade to ChatGPT Plus, a subscription service costing $20 per month.
If users subscribe via Apple's payment system, Apple will receive a portion of the revenue. This strategy offers a potential revenue stream for both companies.
Additionally, as part of the broader AI push, Apple is using its own AI models for most features. These models are said to be comparable to OpenAI's GPT-3.5, although they do not match the capabilities of GPT-4o, the premium version available to ChatGPT Plus users.
OpenAI's ChatGPT runs on Microsoft's Azure cloud platform, benefiting from discounted compute rates due to significant investments from Microsoft.
Despite these discounts, the integration could increase OpenAI's computational costs. Each ChatGPT query incurs costs, influenced by the number of tokens generated. To manage these expenses, only a subset of Siri queries will be processed by ChatGPT.
Amid allegations of data security violations peddled by the likes of Elon Musk, Apple assured users that the ChatGPT integration would prioritize privacy. Unlike the standalone ChatGPT app, the integration on Apple devices will not store conversations or users' IP addresses and will ask for consent at a per-query basis.
Apple's integration with OpenAI is part of a larger AI strategy. The company has plans to introduce various AI-driven features across its devices, many of which are branded as Apple Intelligence and developed in-house.
Moreover, Apple's deal with OpenAI is non-exclusive. The company is already in discussions to offer Google's Gemini chatbot as an additional option and has also considered partnerships with other AI firms like Anthropic.
This approach indicates Apple's intent to provide a diverse range of AI services, similar to offering different search engine options in its Safari browser.
