In a significant development that could reshape the relationship between two of the most influential companies in technology, OpenAI is reportedly preparing legal action against Apple over the partnership that brought ChatGPT to Siri. According to a report from Bloomberg, lawyers at OpenAI are working with an outside legal firm to explore a range of options, including sending a breach of contract notice to Apple without immediately filing a full lawsuit.
The partnership, announced in 2024 as part of iOS 18, was hailed as a landmark integration that allowed iPhone users to access ChatGPT through Siri for certain queries, image generation via Image Playgrounds, and Visual Intelligence features. OpenAI believed the deal would drive massive subscription growth for its premium ChatGPT service, potentially generating billions of dollars per year. However, internal sources indicate that the expected surge in subscribers has not materialized, and OpenAI now accuses Apple of failing to deliver on its promises.
The Origins of the Deal
The collaboration between Apple and OpenAI began amid intense competition in the AI space. Apple, which had been developing its own large language models, decided to partner with OpenAI to accelerate its Siri capabilities. The deal was structured without any upfront payment from Apple to OpenAI, a model that OpenAI executives later described as a 'leap of faith.' Instead, Apple would receive a cut of any subscriptions generated through the integration, which was handled via the Settings app on iPhone.
At the time, OpenAI was eager to gain access to Apple's massive user base, which includes over a billion active devices. The company saw the integration as a way to convert casual ChatGPT users into paying subscribers. An unnamed OpenAI executive told Bloomberg that the opportunity sounded 'amazing' and that the company expected 'deeper integration across more Apple apps and prime placement within the Siri assistant.'
Disappointment and Allegations
Despite the initial optimism, the partnership has not lived up to OpenAI's expectations. The executive cited in the report alleged that Apple has not made an 'honest effort' to promote or effectively integrate ChatGPT. 'We have done everything from a product perspective,' the executive said. 'They have not, and worse, they haven’t even made an honest effort.'
One of the key points of contention is the performance of the subscription channel. OpenAI believed that by placing ChatGPT subscription options directly within the Settings app, Apple would drive significant sign-ups. However, the revenue has fallen far short of projections. 'When we heard about this opportunity, it sounded amazing: being able to acquire a giant number of customers and have distribution in such a big mobile ecosystem,' the executive said. But at the time, Apple was unwilling to share exact product details, asking OpenAI to 'take a leap of faith and trust us.'
The deal's non-exclusive nature is not the driver of OpenAI's legal action, according to the executive. Instead, the core issue appears to be Apple's failure to actively promote the integration or provide the level of visibility OpenAI expected. As a result, OpenAI is now considering a notice alleging breach of contract, which could escalate into a full lawsuit if not resolved.
Apple’s Shift Toward Competitors
Complicating matters further, Apple is reportedly preparing to announce a next-generation version of Siri powered by Google Gemini at its upcoming Worldwide Developers Conference (WWDC). Additionally, iOS 27 is expected to allow users to integrate with other AI models, including Anthropic’s Claude. This move signals that Apple is diversifying its AI partnerships rather than relying solely on OpenAI.
The OpenAI executive downplayed the significance of this shift, noting that the original partnership was never meant to be exclusive. 'Apple opening the iPhone up to other AI models isn’t driving the company’s legal action since the partnership wasn’t meant to be exclusive from the start,' the executive said. However, the broader strategy indicates that Apple is seeking greater flexibility and potentially more favorable terms with other AI providers.
OpenAI’s displeasure with Apple’s approach has also prevented further collaboration. According to the report, OpenAI was not interested in working with Apple on the new models because it felt burned by the initial relationship. 'Apple has so much market power that they can dictate terms,' the executive said. 'We already took this leap of faith with you, and it didn’t work out well.'
Broader Context: OpenAI’s Hardware Ambitions
Adding another layer of tension, OpenAI has been aggressively hiring former Apple engineers to work on its own hardware products. This effort is being led by former Apple design chief Jony Ive, who has been collaborating with OpenAI on new devices. Apple executives have reportedly been frustrated for over a year by OpenAI’s recruiting tactics, viewing them as a direct threat to their own talent pool.
The hardware push reflects OpenAI’s broader strategy to reduce reliance on other companies’ platforms. By developing its own devices, OpenAI can ensure deeper integration of its AI models and avoid the kind of disappointment seen with the Apple partnership. However, this move also risks further straining relations with Apple, as the two companies increasingly compete for talent and market share.
The Current State of ChatGPT on iOS
As of now, ChatGPT remains integrated throughout iOS, serving as a fallback for Siri for world-knowledge queries. It is also available for image generation via Image Playgrounds and Visual Intelligence. Users can access these features without an additional subscription, though premium features require a ChatGPT Plus account.
Despite the legal threats, OpenAI has not yet made a final decision. The report notes that 'no final decisions have been made, and OpenAI still hopes to resolve its issues with Apple outside of court.' This suggests that the two companies may still find a path to compromise, perhaps through renegotiating the terms of their agreement. However, the public airing of grievances indicates that trust has been significantly eroded.
Industry Implications
The dispute between Apple and OpenAI highlights the challenges of partnerships in the rapidly evolving AI landscape. As companies race to integrate advanced language models into consumer products, they must navigate complex issues of distribution, revenue sharing, and market power. Apple’s dominance in the smartphone market gives it significant leverage over partners, while AI startups like OpenAI are eager for access but wary of being exploited.
Legal experts suggest that OpenAI’s case for breach of contract would depend on the specific terms of the agreement, which have not been publicly disclosed. If the deal included explicit commitments by Apple to promote ChatGPT or achieve certain integration milestones, OpenAI may have a strong argument. However, if the terms were vague or left room for interpretation, a lawsuit could be challenging.
For Apple, the dispute comes at a time when it is doubling down on AI investments. The company is reportedly developing its own large language model and has been hiring top AI researchers. The introduction of a Gemini-powered Siri at WWDC would mark a major shift, potentially reducing Apple’s dependence on any single AI partner. This strategy could help Apple maintain control over the user experience while avoiding the kind of conflicts seen with OpenAI.
From a consumer perspective, the rivalry between Apple and OpenAI may ultimately lead to better products, as both companies compete to innovate and capture user attention. However, in the short term, it could create confusion if integrations are disrupted or if legal battles delay new features.
The situation remains fluid, with no final decisions having been made regarding legal proceedings. OpenAI and Apple are both expected to continue their public and private discussions in the coming weeks, as the tech world watches closely to see whether this high-profile partnership can be salvaged or whether it will end in court.
Source: 9to5Mac News