Apple and OpenAI aren’t paying each other yet, says Bloomberg

June 13, 2024
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While the partnership between Apple and OpenAI announced at WWDC this week promises to give ChatGPT a prestigious place in Apple’s ecosystem, it seems neither party is paying the other to make that happen. According to a report from Bloomberg’s Mark Gurman, Apple instead believes that the exposure OpenAI will receive from being on hundreds of millions of Apple devices is “of equal or greater value than monetary payments.”

The report also says this deal isn’t exclusive to OpenAI, and that Apple is in talks with Anthropic and Google to offer their respective chatbots as an alternative option, with an agreement for Google’s Gemini expected to be in place later this year. While Apple will utilize OpenAI’s GPT-4o model to power various AI tasks on iOS 18, iPadOS 18, and macOS Sequoia, its goal is to offer users a range of third-party AI services, akin to how Apple’s Safari browser supports different search engine options.

One way that Apple is planning to make money from these partnerships, according to the Bloomberg report, is via revenue-sharing agreements. That involves taking a cut from any AI provider that monetizes results in their chatbots, such as the $20-per-month subscription plan for ChatGPT Plus.

Apple is reportedly expecting chatbots and LLMs to start tempting people away from using traditional search engines. That’s not ideal for the extremely lucrative arrangement that has Google paying Apple billions of dollars to be the iPhone’s default search engine, so revenue-sharing deals could be one way for Apple to make up for the shortfall.

The announcements around Apple Intelligence and its OpenAI agreement mark a significant development in Apple’s AI strategy, but it’s still early days. The company is aiming to support Apple Intelligence in additional languages besides American English next year according to Bloomberg, and is reportedly considering deals with Baidu and Alibaba to handle offering chatbot features in China, where access to ChatGPT is limited.

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