Apple Applying ChatGPT, Does Not Pay OpenAI

Apple, which announced a partnership with OpenAI, the developer of ChatGPT, reportedly will not pay any separate monetary compensation for the use of artificial intelligence (AI) chatbots. Instead, Apple plans to gain profits from AI by sharing revenue with various partners who generate income through chatbots on its platform.

[Image source=Reuters Yonhap News]

Bloomberg reported on the 13th (local time), citing multiple sources, that Apple does not pay OpenAI any fees related to the partnership. At the annual Worldwide Developers Conference (WWDC) held on the 10th, when the partnership between Apple and OpenAI was announced, no financial terms between the two companies were disclosed.

Sources stated, "Apple does not pay OpenAI any compensation for the partnership," adding, "Instead, Apple believes that equipping hundreds of millions of (Apple) devices with OpenAI’s brand and technology holds value comparable to or greater than monetary compensation."

Accordingly, sources confirmed that the partnership between Apple and OpenAI is unlikely to generate significant revenue for either side, at least initially. However, Apple gains an advantage by partnering with OpenAI to offer consumers advanced chatbot features, potentially encouraging more users to choose its devices. OpenAI, in turn, can expect users of ChatGPT on Apple devices to convert to paid accounts.

The report noted, "As more people use ChatGPT, OpenAI’s costs increase," but added, "ChatGPT provided on Apple devices is free, yet OpenAI and Apple can monetize by converting users to paid accounts." OpenAI’s subscription plans start at $20 per month. If users switch to paid plans, Apple can also earn commissions.

Sam Altman, CEO of OpenAI, attending Apple's annual Worldwide Developers Conference (WWDC)
[Photo by Reuters Yonhap News]

Moreover, this partnership is not exclusive. Apple is also discussing integrating Google Gemini in addition to OpenAI’s ChatGPT. This agreement is expected to take effect by the end of this year. Apple is also reportedly in related talks with Anthropic.

The report stated, "Similar to how Apple offers various search engine options in its Safari browser, it aims to provide users with diverse AI services," adding, "Apple’s goal is to realize profits from AI by signing revenue-sharing agreements with AI partners who generate income through chatbots on its platform."

However, the media outlet predicted that for Apple to succeed with its AI platform, Apple Intelligence, it must expand beyond the U.S. to other countries and languages, a plan that may face challenges in China. Services like ChatGPT and Gemini are banned in China, one of Apple’s largest overseas markets. A source explained, "Although no contracts related to chatbot functions have been signed with local companies yet, Apple is considering agreements with Chinese firms such as Baidu and Alibaba Group Holding."