Why we're watching this: This is the most high-profile test yet of whether AI companies can negotiate from a position of strength on Apple's platform. The outcome shapes the leverage every AI company has in future distribution deals with the world's largest mobile ecosystem.
Key Takeaways
- OpenAI has engaged an outside law firm to explore options including a formal breach-of-contract notice against Apple over the ChatGPT integration
- The partnership has underperformed significantly, with OpenAI complaining the integration was buried, features were hard to find, and subscriber revenue fell far short of projections
- Apple has its own grievances, including concerns over OpenAI’s privacy standards and frustration at the company’s push into hardware with former Apple executives
OpenAI is preparing potential legal action against Apple, enlisting an outside law firm to explore options including a formal breach-of-contract notice over the ChatGPT integration that was announced with significant fanfare at Apple’s Worldwide Developers Conference in June 2024, according to a Bloomberg report citing people familiar with the matter.
The integration wove ChatGPT into Apple’s operating systems as an option within Siri and as part of the iPhone’s Visual Intelligence feature. OpenAI expected the arrangement to funnel billions in new subscriptions its way and establish prime real estate across one of the world’s most-used mobile platforms. Neither materialised.
According to Bloomberg, OpenAI has grown increasingly aggravated, complaining that the integration was buried, its features made difficult to find, and that revenue from the arrangement landed nowhere near projections.
“They basically said, ‘OpenAI needs to take a leap of faith and trust us.’ It didn’t work out well.” — OpenAI Executive, via Bloomberg
Any legal move is expected to wait until after the conclusion of OpenAI’s ongoing trial with Elon Musk, whose lawsuit accuses the company of abandoning its nonprofit founding mission. A formal notice would not necessarily escalate to full litigation immediately.
Apple, for its part, has raised its own concerns: privacy standards at OpenAI and irritation over the company’s hardware push, led by former Apple design chief Jony Ive.
OpenAI is hardly the first major software company to discover that access to Apple’s platform comes with conditions that can shift unilaterally. Google Maps was a flagship feature of the original iPhone until Apple replaced it in 2012 with its own inferior product.
Adobe’s Flash was killed on mobile by a single open letter from Steve Jobs in 2010. Spotify spent years in regulatory battles over App Store rules that disadvantaged it after Apple Music launched, ultimately resulting in a nearly €1.8 billion EU fine against Apple in March 2024.
The irony is not lost on observers that Apple has since struck a separate deal with Google, paying roughly $1 billion a year for Gemini models to power the next generation of Apple Intelligence. The company that was passed over for a rival now funds Apple’s AI infrastructure.
OpenAI is also navigating a strained relationship with Microsoft, its largest backer and infrastructure partner, as it pushes for greater independence ahead of its IPO ambitions. The Apple dispute is the most public signal yet that the company’s distribution partnerships are under strain on multiple fronts, a dynamic being tracked by Relve.
