OpenAI is exploring legal action against Apple $AAPL after a partnership that wove ChatGPT into Apple's operating systems failed to deliver the subscribers and prominence OpenAI expected, according to Bloomberg. Among the options being weighed is a formal breach-of-contract notice to Apple — a step short of full litigation, at least to start — according to Bloomberg.
OpenAI has not committed to any course of action, and Bloomberg reports the company is unlikely to act before its current trial against Elon Musk wraps up. OpenAI still hopes to resolve its grievances outside of court.
The partnership, announced at Apple's Worldwide Developers Conference in June 2024, integrated ChatGPT into Siri and the iPhone's Visual Intelligence feature and gave iPhone users a way to sign up for ChatGPT memberships from the iOS settings menu. OpenAI believed the deal could eventually generate billions of dollars per year in subscriptions. Instead, the integration has been hard to find and revenue from the arrangement is far below projections, according to Bloomberg.
Internal user research that OpenAI shared with Bloomberg found that iPhone owners reach for the dedicated ChatGPT app far more often than they encounter OpenAI's technology through Siri or other Apple services. Structurally, the integration surfaces OpenAI results only when a user explicitly says or types the word "ChatGPT," and even then the reply is condensed into a cramped window that shows far less than OpenAI's own app would.
"We have done everything from a product perspective," an unnamed OpenAI executive told Bloomberg. "They have not, and worse, they haven't even made an honest effort."
From Apple's side, Bloomberg reports two main sources of friction: longstanding doubts about how rigorously OpenAI protects user data, and growing resentment over the startup's device ambitions, which are being driven by a cohort of former Apple talent including onetime design chief Jony Ive. OpenAI acquired Ive's hardware startup for about $6.5 billion and has been recruiting engineers from Apple's hardware team, offering compensation packages worth millions of dollars more than Apple provides.
OpenAI's attempts to renegotiate the partnership have stalled, according to Bloomberg. Complicating matters further, iOS 27 is expected to bring Anthropic's Claude and Google $GOOGL Gemini directly into Apple's ecosystem, dismantling the privileged position ChatGPT has held since the original deal.
Apple has struggled to deliver its own AI features on time, settling a class action lawsuit for $250 million earlier this month over alleged false advertising about Siri capabilities. Some of those features, marketed to consumers in 2024, have still not reached the market. Separately, Apple reached an agreement with Google — worth around $1 billion a year — to underpin its broader AI ambitions with Gemini technology, Bloomberg has reported. Bloomberg reports that OpenAI declined to pursue that deeper role, having soured on Apple after its experience with the original deal.
Apple stock fell as much as 1.2% to $295.38 on Thursday after the news.