Bloomberg: Apple Doesn’t Pay OpenAI for Using ChatGPT in iOS

Apple is not paying OpenAI for integrating the ChatGPT chatbot into iOS 18, according to anonymous sources cited by Bloomberg. The sources indicate that Apple believes the exposure of OpenAI’s brand and technology across hundreds of millions of devices offers equal or greater value than monetary compensation.

During the WWDC 2024 event, Apple introduced iOS 18, which features several AI functionalities powered by OpenAI’s technology. However, neither company disclosed the financial terms of the deal, nor clarified who is paying whom for the integration.

Bloomberg’s sources suggest that the partnership will not generate significant revenue for either party, at least initially. Through OpenAI, Apple gains a competitive edge by providing users with an advanced chatbot, which could encourage more time spent on Apple devices or even drive subscriptions.

The agreement with OpenAI is part of Apple’s broader push into AI. According to Bloomberg, this partnership could be costly for OpenAI, which has to pay Microsoft for hosting ChatGPT on Azure cloud computing systems. The more people use ChatGPT, the higher OpenAI’s expenses grow. Integrating ChatGPT with Apple devices will significantly increase OpenAI’s budgetary load.

ChatGPT will be free on Apple products, but both companies can potentially profit by converting free users into premium subscribers. The starting subscription fee for ChatGPT is $20 per month.

Apple also plans to strike a similar deal with Google to add the Gemini chatbot as an additional option. The agreement is expected to be signed by the end of the year. Furthermore, Apple has held talks with Anthropic to integrate the Claude chatbot.

Ultimately, the Cupertino-based company aims to offer users a range of AI services, similar to how it provides various search engine options in Safari. Bloomberg’s sources stated that Apple intends to profit from AI by entering into revenue-sharing agreements, receiving a portion of the income from partners who monetize chatbots on Apple platforms.

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