Apple Won't Pay OpenAI for ChatGPT Integration, Banks on Brand Exposure Instead

by Kay Lee

Apple has strategically decided not to pay OpenAI for the integration of ChatGPT into its ecosystem, instead valuing the significant exposure OpenAI will receive by being accessible on hundreds of millions of Apple devices. This integration is part of Apple's broader push into artificial intelligence, unveiled during the Worldwide Developers Conference, where the tech giant showcased new AI features across iPhone, iPad, and Mac devices.

Under the terms of the partnership, ChatGPT will be woven into Apple's Siri and other software tools, enhancing the tech giant's AI offerings without direct financial transactions. Despite the non-financial arrangement, both companies are poised to benefit. Apple provides OpenAI with invaluable brand exposure, while OpenAI's advanced AI capabilities could encourage users to spend more time with Apple devices or even prompt upgrades.

The deal, which also allows Apple to possibly enter revenue-sharing agreements in the future, could become financially significant for OpenAI as it needs to cover the costs of hosting ChatGPT on Microsoft's Azure cloud-computing systems. These costs could escalate as more users engage with ChatGPT through Apple devices.

Furthermore, Apple is not limiting its AI enhancements to OpenAI alone. It is also in talks with Google to integrate the Gemini chatbot and has discussed potential partnerships with Anthropic. These collaborations aim to provide Apple users with a variety of third-party AI services, similar to the multiple search engine options available in Apple's Safari browser.

Although Apple's AI advancements are currently available in American English, plans are underway to expand these services to additional languages and countries, which may present challenges in markets like China where services like ChatGPT are restricted. Apple is exploring partnerships with local Chinese firms such as Baidu Inc. and Alibaba Group Holding Ltd. to navigate these challenges and bring its AI capabilities to a broader audience.