Apple Scores A Sweet Deal With OpenAI To Deploy ChatGPT On iPhones

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As part of its push to deliver AI to its customers, Apple teamed up with OpenAI to offer ChatGPT as a solution to assist users with Siri requests and with various writing tasks. However, it seems as if Apple is getting an incredible deal according to reporting from Bloomberg’s Mark Gurman, who says Apple will be paying a grand total of $0 for this partnership.

The reason Apple got this much of a good deal is that it considers access to its massive userbase and generating awareness about the OpenAI brand to be payment enough, in what might the biggest “for exposure” move ever. It’s a surprising revelation as OpenAI has Microsoft Azure bills to pay when someone uses ChatGPT. Although it might be that Microsoft, which is an investor in OpenAI, is helping on that front to make this deal tenable.

Gurman says that another reason this agreement was reached is because OpenAI hopes to convert users to its paid service, which runs at $20 a month. With a userbase as large as Apple’s, converting a small slice of it into paying customers will probably help the math make sense. Of course, ChatGPT will need to deliver serious results for these conversions to happen.

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However, Apple has plans on adding more AI partners in the future. During WWDC, Apple said that it’s working on bringing more providers in the future, meaning more competition for Open AI. Gurman says that Google’s Gemini and Anthropic have both had conversations with Apple about becoming providers alongside OpenAI. Apple aims to make several of these available as choices similar to how it lets users choose search engine providers in Safari.

The push for AI isn’t just about delivering new features to users, though. Ultimately, Apple wants to make money from revenue sharing agreements where it gets a cut from any monetization AI providers achieve on its platforms, according to Gurman. It seems as if the company is taking the App store approach with this, where it also gets a cut whenever developers make money with services offered.

Time will tell how this all shakes out. Although it might make privacy conscious users skittish to use ChatGPT knowing the terms of the deal.