On Monday, Apple concluded its WWDC developer keynote by showing how it will catch up to competitors engaged in the generative AI race. With Apple Intelligence, Apple is planning to use its own generative AI models to create a “personal intelligence system” that works across iOS, iPadOS, and macOS while respecting user privacy.
However, to complement its own AI models that are still in development, Apple also announced a partnership with OpenAI to integrate ChatGPT into iOS 18, iPadOS 18, and macOS Sequoia later this year. The chatbot will be accessible for free via Siri and Apple’s systemwide Writing Tools, and Apple is also getting access to OpenAI’s latest GPT4-o flagship model. However, this ChatGPT integration on Apple devices will be optional.
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After Microsoft invested billions of dollars into ChatGPT to integrate the company’s technology into its Copilot products, you would think that OpenAI scored a lucrative deal with Apple, a company that can’t really afford to be left out of the AI conversation. However, that’s apparently not what happened.
Bloomberg’s Mark Gurman is reporting that “Apple isn’t paying OpenAI as part of the partnership,” citing people familiar with the negotiations. “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.”
Apple announced back in February that its installed base of active devices had crossed 2.2 billion, which is an all-time high for the company. However, when Apple Intelligence and its ChatGPT integration launch in beta later this fall, it won’t be available on all these devices.
Apple Intelligence will require an iPhone 15 Pro or Pro Max or newer, and an iPad and Mac with an M1 chip or newer. Moreover, Apple’s personal intelligence system will require Siri and device language to be set to U.S. English, with support for more languages coming later.
Even though the user base for Apple Intelligence will be quite limited at launch, developing and running cutting-edge AI models at this scale is really expensive. However, even though OpenAI should increase its expenses by making ChatGPT easily accessible on Apple devices, the company could also monetize this new audience by convincing users to subscribe to its paid plans.
Apple’s partnership with OpenAI is not exclusive, and we may see more AI models being integrated into Apple’s platforms down the line. According to Gurman, Apple may eventually leverage its large device ecosystem to extract revenue from the AI companies it’s partnering with.
“Eventually, Apple aims to make money from AI by striking revenue-sharing agreements whereby it gets a cut from AI partners that monetize results in chatbots on Apple platforms, according to the people. The company believes that AI could chip away at the billions of dollars it gets from its Google search deal because users will favor chatbots and other tools over search engines,” Gurman wrote.
