OpenAI expected the ChatGPT-Apple deal to be a goldmine. Two years in. The company is preparing to sue instead.
Bloomberg's Mark Gurman reported Thursday that OpenAI has hired an outside law firm to explore options against Apple, including sending a formal breach-of-contract notice. The AI startup claims the ChatGPT integration baked into Apple Intelligence has failed to deliver the subscribers and revenue it was promised.
"They basically said, 'OpenAI needs to take a leap of faith and trust us,'" one OpenAI executive told Bloomberg. "It didn't work out well." The deal, announced at WWDC in June 2024, wove ChatGPT into Siri and the iPhone's Visual Intelligence feature. OpenAI expected the arrangement to funnel billions of dollars in subscriptions from hundreds of millions of Apple users.
Instead, OpenAI complains the integration was buried, features are hard to find, and revenue is nowhere near projections.
Apple has its own grievances. The company is reportedly irritated by OpenAI's push into consumer hardware, an effort led by former Apple design chief Jony Ive, and has raised concerns about OpenAI's privacy standards. The partnership has also been diluted from within. Apple struck a multiyear deal with Google in January to power Apple Intelligence with Gemini models, reportedly paying roughly $1 billion a year.
OpenAI's technology is no longer the centerpiece it was positioned to be.
Any legal action would likely wait until after OpenAI's ongoing trial with Elon Musk, who is suing the company over its shift from nonprofit to for-profit.
OpenAI is hardly the first partner to feel burned. Apple has a long history of embracing outside technology and then replacing it, Google Maps was removed from the iPhone in 2012 after years of friction.
Steve Jobs killed Flash on iOS in 2010. Spotify fought Apple's App Store rules for years before the European Commission fined Apple nearly 1.8 billion euros in March 2024. For now, ChatGPT features remain available in Apple Intelligence. But as Apple diversifies its AI partners and builds internal capabilities, OpenAI's front-and-center placement in the ecosystem appears to be fading.
