Apple Reportedly Not Paying OpenAI to Use ChatGPT in iOS 18

Alongside its Apple Intelligence feature set, Apple on Monday announced a partnership with OpenAI that will allow Siri to access ChatGPT directly in iOS 18, iPadOS 18, and macOS Sequoia to provide better responses in relevant situations. But according to a new Bloomberg report, nobody is paying cash to anybody for the arrangement.

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From Mark Gurman's report:

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.

Despite the agreement, the partnership for OpenAI could become expensive, as more and more Apple device users tap into ChatGPT's capabilities and suck up more of the company's compute power and budget.

However, Gurman notes that OpenAI could profit from the deal by encouraging Apple users to subscribe to ChatGPT Plus for $20 a month. If these users sign up through an Apple device, Apple may also be in a position to receive a commission.

Additionally, Apple plans to increase its earnings from AI through revenue-sharing agreements with its partners. According to the report, Apple is already discussing offering Google's Gemini chatbot as an additional option, an agreement that should be in place later this year.

Ultimately, Apple aims to take a portion of the revenue generated from monetizing chatbot results on its operating systems, anticipating that more users will rely on AI instead of search engines. Such a shift could eventually reduce the massive amounts of revenue Apple currently earns from its lucrative search deal with Google.

The report notes that Apple has yet to reach a deal with a local Chinese provider to handle chatbot feature, but has been considering an arrangement with companies such as Baidu and Alibaba. To begin with, Apple Intelligence will only be available in U.S. English, with more languages set to be supported next year.

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Top Rated Comments

arkitect Avatar
5 weeks ago
And we all know that when you don't pay, you are the product… so… yeah.

OpenAI are definitely getting something in return. Just, perhaps not in cash.
Score: 61 Votes (Like | Disagree)
t0rqx Avatar
5 weeks ago

Yes. Exposure to 1.5 billion people.
And their data to train.
Score: 25 Votes (Like | Disagree)
hagar Avatar
5 weeks ago

And we all know that when you don't pay, you are the product… so… yeah.

OpenAI are definitely getting something in return. Just, perhaps not in cash.
Yes. Exposure to 1.5 billion people.
Score: 21 Votes (Like | Disagree)
gpat Avatar
5 weeks ago
Of course Apple is not paying money.
It's paying with their users, we're the currency.
Score: 21 Votes (Like | Disagree)
Etc_ Avatar
5 weeks ago

I don't quite understand how Apple's system is set up.

* There is on-device processing for most tasks
* There is cloud processing for some heavy tasks on Apple-owned & operated servers
* Some requests on "world data" are optionally sent to ChatGPT (in a way that OpenAI can't build up a picture of your requests over time)

So, does this mean that Apple have developed their own genAI framework and trained an LLM in 18 months? Or have Open AI provided the ChatGPT framework to Apple which they then run on Apple servers and train with their own LLMs? Is this going to be like Maps where the Apple servers/LLMs start out quite limited (hence "world data" questions are sent to ChatGPT), but over time Apple will add more servers and train the LLMs with wider data sets so they can eventually operate an end-to-end Apple AI service?
Here is a video, where they explain the technical side of Apple Intelligence: [MEDIA=twitter]1800277157135909005[/MEDIA]
Score: 16 Votes (Like | Disagree)
krspkbl Avatar
5 weeks ago
There’s the difference between Apple and Microsoft.

Apple acts like “We aren’t paying you! You need us. You should thank us!”

Microsoft is “Here’s $10 billion and you can use our servers”

Someone think of the AAPL shareholders! :(
Score: 15 Votes (Like | Disagree)