Apple Is Paying OpenAI In Exposure Instead Of Cash, As The Primary Gain For ChatGPT Integration With Siri

One of the key announcements at the WWDC 2024 did not just revolve around Apple Intelligence features but the partnership with OpenAI to bring ChatGPT to Apple’s ecosystem with iOS 18. The platform’s integration with Siri would allow the virtual assistant to respond better to specific situations. For such technology to come on board, there is usually a hefty cost attached to it. However, with this partnership, Apple is not paying OpenAI in cash; instead, it is focusing on the tangible benefit, which is exposure.

Apple and OpenAI partnership to bring ChatGPT to iOS 18 does not follow a revenue-sharing model

According to a report by Mark Gurman, Apple will not be paying for the partnership; instead, it will give ChatGPT access to a pool of customers large enough that it can potentially give far greater value than money. Gurman wrote:

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

Neither Apple nor OpenAI would derive any apparent revenues from the partnership, a unique deal that can benefit both parties in the long run. Given that there are currently millions of active iPhone users, OpenAI could access a large number of users due to the integration. On the other hand, the Cupertino tech giant would have a ChatGPT-powered revamped Siri that is far smarter and more capable.

Even though it seems to be an agreement with a win-win situation, Gurman expressed how OpenAI could find the cost of the deal resting on its shoulders, especially with rising server costs due to the increase in chatbot use. While iPhone users could use Siri-integrated ChatGPT for free, the only way OpenAI could make some financial gains is through users opting for the ChatGPT premium subscriptions. Apple might claim its share of the subscription money as well as a commission.

Apple’s deal with OpenAI is not exclusive, and it is potentially looking into other AI models that would follow a revenue-sharing strategy. It even briefly mentioned during the WWDC that Google’s Gemini AI would come to iOS 18 later this year. Apple’s efforts towards the LLM model, gradually replacing traditional search engines, could massively reduce the revenue earned from Google being the iPhone’s default search engine.

The report further mentioned how Apple Intelligence could be extended to other languages. Apple is said to be in talks with Baidu and Alibaba to bring the chatbot features to China, which could also mark a major development in the company’s AI strategy.

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