Apple will not pay OpenAI for ChatGPT integration in iOS18

Apple announced at WWDC that it will bring ChatGPT to iOS18 as part of an agreement with OpenAI. Details of the agreement are still unknown, but a new report says that Apple will not pay OpenAI as part of the deal.

Also read: Apple unveils AI-focused chip in latest iPad Pro

Apple and OpenAI did not disclose the details of their agreement during Monday’s WWDC. Both companies have remained tight-lipped about the financial terms. Nevertheless, a recent Bloomberg report said that Apple will not pay cash to OpenAI for embedding its chatbot in iOS. 

Apple will embed ChatGPT in Siri

The partnership arrangement between Apple and OpenAI includes integrating ChatGPT into Apple’s latest writing tools, including the well-known Siri. Mark Gurman explained in his report that some people who were briefed on the matter hinted at the initial arrangement. Gurman noted that:

“The partnership isn’t expected to generate meaningful revenue for either party— at least at the outset.”

At this stage, Apple will not pay OpenAI for its services, nor will OpenAI pay Apple anything for access to its system. ChatGPT will be available free of cost for Apple users, though users will have a choice to claim or decline the service. 

Apple has been working with OpenAI to integrate ChatGPT in iOS18 along with iPadOS18 and macOS Sequoia. Apple users who have also subscribed to ChatGPT Plus will be able to access additional features after they will log in to their OpenAI accounts. 

OpenAI will get access to the iOS user base

The partnership between OpenAI and Apple is a strategic arrangement. Gurman claimed that OpenAI sees the agreement as an opportunity to increase exposure to the iOS user base rather than immediate monetary benefits. For OpenAI, the value lies in access to a platform that is home to hundreds of millions of users. 

According to Apple, the integration with iOS will give OpenAI’s technology a visibility boost. Currently, OpenAI’s standalone ChatGPT app is available on Apple’s App Store. Users can pay through an in-app purchase system for ChatGPT Plus, and Apple receives up to a 30% share of those payments.

Apple will benefit from offering an established chatbot to its users, who will spend more time using the devices and more on updates. During a keynote address at its Worldwide Developers Conference, Apple displayed AI features for its flagship iPhone, iPad, and Mac. However, the company developed these AI features in-house, which has its own branding, Apple Intelligence.

Apple is considering AI tools from different vendors

The agreement is a step toward Apple’s broader AI push, according to the report. Sources said the smartphone giant is trying to leverage different AI models to make money through revenue-sharing deals with different AI vendors. In this way, Apple gets a share of revenue from AI partners who monetize chatbot answers on the Apple platform.

Also read: Apple unveils AI enhanced iPhone 16 with advanced features

According to a previous report, the iPhone maker negotiated with Anthropic for chatbot integration to provide a range of options to its users. Apple is also negotiating with other AI developers as alternate options. For example, it is in talks with Google for Gemini Chatbot integration as an additional option. An agreement is expected later this year. Apple is also considering Chinese companies like Alibaba and Baidu for the Chinese market as its share has plummeted in the country.

Gurman believes that AI can negatively impact Apple’s revenues from its Google search integration deal. He noted that Apple is working on finding new ways to compensate for the diverging revenue stream, as users may prefer chatbots and other AI tools over traditional search engines.

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Cryptopolitan reporting by Aamir Sheikh