Report: Apple isn’t paying OpenAI for ChatGPT integration into OSes

On Monday, Apple introduced it could be integrating OpenAI’s ChatGPT AI assistant into upcoming variations of its iPhone, iPad, and Mac working programs. It paves the way in which for future third-party AI mannequin integrations, however given Google’s multi-billion-dollar deal with Apple for preferential internet search, the OpenAI announcement impressed hypothesis about who’s paying whom. In accordance with a Bloomberg report revealed Wednesday, Apple considers ChatGPT’s placement on its gadgets as compensation sufficient.

“Apple isn’t paying OpenAI as a part of the partnership,” writes Bloomberg reporter Mark Gurman, citing folks conversant in the matter who want to stay nameless. “As an alternative, Apple believes pushing OpenAI’s model and know-how to tons of of tens of millions of its gadgets is of equal or higher worth than financial funds.”

The Bloomberg report states that neither firm expects the settlement to generate significant income within the brief time period, and actually, the partnership may burn more money for OpenAI, as a result of it pays Microsoft to host ChatGPT’s capabilities on its Azure cloud. Nevertheless, OpenAI may benefit by changing free customers to paid subscriptions, and Apple doubtlessly advantages by offering simple, built-in entry to ChatGPT throughout a time when its personal in-house LLMs are nonetheless catching up.

And there is one other angle at play. Presently, OpenAI provides subscriptions (ChatGPT Plus, Enterprise, Group) that unlock extra options. If customers subscribe to OpenAI by the ChatGPT app on an Apple gadget, the method will reportedly use Apple’s cost platform, which can give Apple a major lower of the income. In accordance with the report, Apple hopes to barter extra revenue-sharing offers with AI distributors sooner or later.

Why OpenAI

The rise of ChatGPT within the public eye over the previous 18 months has made OpenAI an influence participant within the tech business, permitting it to strike deals with publishers for AI coaching content material—and guarantee continued help from Microsoft within the type of investments that commerce very important funding and compute for entry to OpenAI’s giant language mannequin (LLM) know-how like GPT-4.

Nonetheless, Apple’s alternative of ChatGPT as Apple’s first exterior AI integration has led to widespread misunderstanding, particularly since Apple buried the lede about its personal in-house LLM know-how that powers its new “Apple Intelligence” platform.

On Apple’s half, CEO Tim Cook dinner told The Washington Post that it selected OpenAI as its first third-party AI accomplice as a result of he thinks the corporate controls the main LLM know-how in the mean time: “I believe they’re a pioneer within the space, and right now they’ve the very best mannequin,” he stated. “We’re integrating with different folks as nicely. However they’re first, and I believe right now it’s as a result of they’re greatest.”

Apple’s alternative additionally brings threat. OpenAI’s document is not spotless, racking up a string of public controversies over the previous month that embrace an accusation from actress Scarlett Johansson that the corporate deliberately imitated her voice, resignations from a key scientist and security personnel, the revelation of a restrictive NDA for ex-employees that prevented public criticism, and accusations in opposition to OpenAI CEO Sam Altman of “psychological abuse” associated by a former member of the OpenAI board.

In the meantime, critics of privateness points associated to gathering knowledge for coaching AI fashions—together with OpenAI foe Elon Musk, who took to X on Monday to spread misconceptions about how the ChatGPT integration would possibly work—additionally frightened that the Apple-OpenAI deal would possibly expose private knowledge to the AI firm, though each corporations strongly deny that would be the case.

Wanting forward, Apple’s take care of OpenAI shouldn’t be unique, and the corporate is already in talks to supply Google’s Gemini chatbot as a further choice later this yr. Apple has additionally reportedly held talks with Anthropic (maker of Claude 3) as a possible chatbot accomplice, signaling its intention to supply customers with a variety of AI providers, very similar to how the corporate provides numerous search engine choices in Safari.