While the idea of a financial exchange between Apple an OpenAI as partnership may have given Microsoft a bit of pause as a principal investor in the ChatGPT provider, it seems the deal between the two is less about money and more about exposure.
According to a report from Bloomberg, Apple isn’t paying OpenAI for access to its latest large language model ChatGPT4o and is instead leveraging access to its millions of users as payment.
The arrangement includes weaving ChatGPT, a digital assistant that responds in plain terms to information requests, into Apple’s Siri and new writing tools. Apple isn’t paying OpenAI as part of the partnership, said the people, who asked not to be identified because the deal terms are private. Instead, Apple believes pushing OpenAI’s brand and technology to hundreds of millions of its devices is of equal or greater value than monetary payments, these people said.
Parties familiar with the OpenAI/Apple agreement, Bloomberg
In typical Apple fashion, it’s using its audience as bargaining tool to extract more favorable terms for itself as a company and plans to do so with future AI efforts. In the future, Apple would like to establish a revenue-share with future AI partners when they monetize results via chatbots or other services on Apple’s platform.
However, with Apple’s stringent restrictions on user data, I’m not sure this new deal with OpenAI or future deals with additional AI partners will be as mutually beneficial as presented.
As part of this unorthodox parallel AI execution, Apple will not allow OpenAI to store prompts or IP addresses as the company already stated that its swaps out IP addresses after each ping to the cloud. With just the blocking of access to IP addresses and limited access to prompts, OpenAI seems to be sacrificing a lot to in turn to gain access to the very thing it needs to grow its LLMs.
However, Apple does have the ability to scrap both the prompt and results as well as all of the user info, app links, and preferences to train its own LLMs and eventually Sherlock any partnered AI service.
It should also be noted that Apple is still in talks with Google to bring its Gemini LLM to the platform, which will surely wedge OpenAI out of the conversation due to Apple and Google’s longstanding partnership with Search on iOS devices.
At this point it would seem that OpenAI is hoping to convert the free access Apple is offering its users of its embedded ChatGPT4o access to paid subscribers of its ChatGPT Plus solution. With ChatGPT being exposed to over millions of iOS and Mac devices, if only a fraction convert, OpenAI may view this undoubtedly limited partnership as a success.
At this time, it’s unclear how OpenAI is leveraging Microsoft’s Azure’s cloud services and tools, but I suspect this could feel like a snub, in so much, as Apple gets to leverage the Azure servers OpenAI utilizes for results users choose over Apple Intelligence, for free. Instead of being able to go to investors during its quarterly earnings and saying here is revenue return for Azure use with tie-ins to the Apple deal, Microsoft may end up just showing an increase in server costs.
Perhaps, there are more details of the deal that will surface to explain OpenAI’s intentions with Apple, but on face value, this appears to be a short-term marketing effort more than a step in securing an inextricable AI presence on Apple devices like Google did with Search.
